Cars24 gets $11 Mn nitrogen boost in unicorn race; now valued at $666 Mn

Indian startup industry is well on its way to becoming a fast-paced unicorn factory. Startups that were founded not so long ago are achieving $1 billion valuations.

Recently, we talked about how a 7-year beauty marketplace Nykaa is not too far away from becoming a unicorn. BigBasket took 8 years to cross the benchmark, while Swiggy added a horn to its horse in less than 4 years. Five-year-old Rivigo is merely one tranche away from the status, while Udaan became India’s fastest unicorn in barely 2 years.

Another startup has joined the list of startups that are in the last leg of getting that mythical tag, namely, Cars24. Remember how last year in July when the reports were circulated that Cars24 had raised a massive $50 million round? Remember what was the valuation of the company at that time? An estimate of $250 million.

Now, that valuation looks like a long lost history even in a short duration.

The company received the final tranche of the $50 million funding, Rs 331.09 crore to be precise in October last year. Two months later, a valuation report was prepared, where the equity value of the firm came out to be Rs 3,809.08 crore, and in USD terms $547.52 million.

At this pre money valuation, the firm has raised another $11 million from Singapore-based parent entity in March, according to RoC filing with MCA. Subsequently, the post money valuation now stands at $665.94 million (Rs 4,602.33 crore)

This is an absolute surprise as when media talked about startups that are slated to become unicorns this year, nobody ever talked about Cars24. All the aspirations were set on the company’s indirect competitor Droom.

While there is no news on the Droom front, Cars24 seems to be the faster horse in the unicorn race. In less than 6 months the company more than doubled its valuation, and in the next 3 months, it grew further by 21.6 per cent. Basically, in less than 9 months the valuation grew 2.6X.

If the trend continues in the coming funding rounds in the Mehul Agarwal and Vikram Chopra founded firm, the company would be valued at $1 billion or more soon.

For the uninitiated Cars24 runs with an omnichannel approach to the transaction in the used cars market. Having a large string of competitors like CarDekho, CarTrade and others, this pace of growth becomes appreciable and concerning at the same time. Not just for Cars24, but other younger unicorns as well.

Concerning, why? Because it makes one question that what substance these valuations are riding on. Are the businesses driven by value creation or the mindless quest of partaking in an elite group?