CarTrade shrinks losses by 90% to Rs 13 Cr in FY17

CarTrade and Carwale parent entity MXC Solutions India has significantly improved its financials in FY17. The Mumbai-based company has registered a growth of 21.73 per cent in revenue to Rs 52.52 crore in the aforementioned fiscal, while squeezed its losses by a whopping 90 per cent to Rs 13.1 crore, reveals RoC filings with MCA.

With a loss of Rs 133.4 crore, the Temasek-backed company had posted a revenue of Rs 34.7 crore in the financial year 2015-16. Importantly, the decrease in overall loss was largely driven by changes in operations, investments, and infrastructure rather than a spike in turnover.

According to the filings, CarTrade also earned revenue via investment in mutual funds.

Started as pure-play automobile platform, CarTrade recently forayed into B2B space through the acquisition of Shriram Automall India Limited (SAMIL). SAMIL auctions used cars in (dealer to dealer space) and slated to plug the missing part - offline presence for the company.

A year ago, the Tiger Global-funded company also had acquired vehicle inspection firm Adroit. It also merged SAMIL and Adroit recently.

So far, CarTrade had raked-in about $240 million risk capital from the likes of aforementioned investors including Warburg Pincus. Last year it scooped up a $55 million round from Temasek.

Meanwhile, CarTrade rival Jaipur-based CarDekho had raised a total funding of $75 million from various investors, including Ratan Tata, Times Internet, HDFC Bank, Hillhouse Capital, Tybourne Capital, and leading Japanese advertising company, Dentsu Inc.

CarTrade competes with CarTrade and used car verticals of Quikr as well as Olx.

While Quikr posted a consolidated revenue of Rs 64 crore in FY17 with a 55 percent increase in revenue as compared to FY16, Olx turned profitable in FY17  with a profit of Rs 8 crore.

Used car segment has an enormous opportunity and can accommodate multiple business models/players as over 85 percent of the overall market is unorganised. Besides sizeable opportunity, the market is growing rapidly (more than 25 per cent on yearly basis), so there is enough room for classifieds, inventory, and transaction- led models.