Indians’ fear of contracting coronavirus has given birth to the country’s latest unicorn.
On Nov. 24, Cars24 India, an online marketplace for second-hand cars, said it had raised $200 million (Rs1,330 crore) on a valuation of over $1 billion. The Gurugram-based company raised the money from DST Global, the investment firm led by Russia’s most influential tech investor Yuri Milner.
Cars24 joins a host of Indian startups that crossed $1-billion in valuation during the pandemic. Most of these ventures got a push as Indians opted to stay indoors and transact online to avoid contracting the virus.
The pandemic has also given a boost to the used cars industry in India as people try to avoid public transport.
In the financial year ending March 2019, Cars24 reported revenue of $240 million. Now, it is aiming to generate annual gross revenue of $600 million, as per the company’s CEO Vikram Chopra. Given the recent trends, that might not be hard to achieve.
Boom for the pre-owned car market
Since June, when the lockdowns in India lifted, Cars24 has seen a 20% rise in sales. “Our awareness among consumers has shot up dramatically,” Chopra, who initially thought the increase in sales would be short-lived, told Bloomberg.
Cars24 is not alone in witnessing this trend. OLX, an online marketplace for all kinds of used goods, has also registered a spike in sales of pre-owned vehicles. “As India started unlocking, consumers realised that they need to own a personal car to meet their day to day transportation needs… Pre-owned cars offer the best value realisation to these consumers at a time when their incomes have been impacted,” said Amit Kumar, head of OLX Autos India.
At OLX’s trading platform for pre-owned cars, the company witnessed the demand going up by 133% after the lockdown while supply is up by 112%.
In October, OLX also conducted a survey among 5,800 people to determine the sentiment of automobile buyers and sellers across India for pre-owned cars. As per the findings of the survey, car buyers were shunning shared modes of transportation and opting for personal cars. Over 20% of respondents said they would prefer to buy a pre-owned car for their daily office commute while 67% of the respondents said that they would buy a used car to travel with their families.