CarDekho becomes the 33rd unicorn; raises $250 mln

CarDekho has raised a fresh $250 million in funding at a valuation of $1.2 billion, joining the ranks of the unicorn. The financing which is part of the firm’s pre-IPO round includes a mix of $200 million equity investment and $50 million debt funding. Leapfrog Investments led the funding round along with participation from Canyon Partners, Mirae Asset, Harbor Spring Capital, and existing investors Sequoia Capital India and Sunley House.

The Jaipur-based online car search platform will use the fresh capital to build on the growth of its varied businesses including used-car transactions, insurance, and financial services verticals, strengthen its technological capabilities and expand its global footprint.

India’s total count of unicorns so far this year now stands at 33. IPO-bound digital payments firm Mobikwik is the other startup to have recently entered the coveted unicorn club, on the back of a secondary ESOP sale round led by former Blackstone India head Mathew Cyriac, according to various media reports.

The latest fundraise is 13-year old CarDekho’s largest to date. It had last raised about $70 million in series D funding from a clutch of investors at an estimated valuation of over $700 million in December 2019.

The company said it plans to expand across India with retail hubs that will focus on both used car buying and certified pre-owned car retail transactions with customers. New investor LeapFrog will support the firm’s plans to deliver affordable vehicles, insurance, and finance to millions of new emerging consumers, it said in a statement issued on Wednesday.

CarDekho claims that its new Auto and financial services businesses are already profitable while its insurance business, InsuranceDekho.com, has crossed the breakeven point. The CarDekho Group that runs a bunch of local auto portals including Gaadi.com and ZigWheels.com exceeded the $100 million revenue run-rate in September, the firm said.

CarDekho works directly with a host of automobile manufacturers in India, amounting to up to 30% of annual sales for its strategic partners. The company has a network of over 3,500 new auto dealers, more than 4,000 used car dealers, homegrown traders, and entrepreneurs. The firm’s auto and non-auto products are currently used in more than 30 countries globally.