The fundraising wait finally seems to be over for the online auto marketplace CarDekho, which last raised funds way back in 2016. According to Economic Times (ET), CarDekho is all set to raise $100 million in its latest fundraising round. The funding is most likely to be spearheaded by Sequoia Capital, which may reach out to its $8 billion global growth fund corpus to fuel this round.
According to reports, existing investors Hillhouse Capital may also participate in the funding round. Following the latest funding round, CarDekho is likely to be valued at approximately $400-500 million, as per the sources. This is tad higher than CarDekho’s previous valuation of $360 Mn when it raised funds in 2016.
If this funding round does go through then CarDekho will become first Indian startup to receive funds from Sequoia Capital’s global growth fund. This Sequoia fund is said to be aimed at taking bold bets on late-stage startups spread across India, Southeast Asia and also United States.
Interestingly, Sequoia Capital is also an investor in Cars24. Although Cars24 follows a different business model than CarDekho, it is one of the direct competitors of the latter in the same segment.
CarDekho’s verticals are performing well
If reports are anything to go by, CarDekho’s bet on business verticals such as financing and insurance for the used car segment seems to be paying off. As per ET, these two verticals have significantly helped in swelling the company’s kitty with FY18 revenue growing at approximately 40% to reach at Rs 160 crore from last year’s 114 crore. ET also reported that the Gurgaon based startup has also managed to trim down its losses to Rs 70 crore from Rs 135 crore in FY17.
It clearly seems that insurance and financing within the used car segment has become a lucrative area for auto classified players such as CarDekho. Focus on new verticals like insurance and financing appears to be need of the hour as online auto startups as they seem to be struggling to monetize and scale their business based on traditional listing and lead generation.
