Exclusive: CarTrade set to become unicorn as valuation inches close to $1 Bn

Automobile classifieds portal CarTrade has raised Rs 184 crore or $25 million from Malabar India Fund and IIFL. This is the maiden round for the Mumbai-based company in 2021 and the second in the past year.

CarTrade has allotted 13,36,310 equity shares to raise Rs 184 crore on March 31, regulatory filings show. Malabar has invested Rs 109 crore in this tranche while IIFL put in Rs 75 crore.

According to Fintrackr’s calculations, CarTrade has reached a post-money valuation of around Rs 7,100 crore or $967 million as on March 31, just shy of a unicorn or $1 billion valuation. The company’s valuation has almost doubled in less than a year. 

Led by Sumeet Nagar, Malabar India Fund is an India-focussed hedge fund founded in 2008 with the backing of reputed institutional value investors from the US and Asia. Following the infusion, Malabar and IIFL have picked up a 1.54% and 1.06% stake, respectively.

CarTrade last raised Rs 321.6 crore in a Series H round from existing investors Temasek, Warburg Pincus and March Capital Partners in June 2020. At the time, the valuation of the company was Rs 3,930.3 crore or $525 million. 

With the fresh funding, CarTrade has become the second-highest valued startup in the automobile segment. In November 2020, Cars24 had raised $200 million in a Series E round led by DST Global at a valuation of over $1 billion. Meanwhile, earlier this month, six startups including CRED, Meesho, ShareChat, Gupshup, PharmEasy and Groww made their entry into the unicorn club after being valued at $1 billion or more.  

Apart from this fresh infusion, CarTrade has also converted share warrants held by Sanghi into equity shares worth Rs 57.3 crore. There could be a secondary transaction as part of this round with more infusion of funds where the valuation may creep past the $1 billion mark in the coming weeks.

CarTrade predominantly focuses on two core verticals: auctioning cars, tractors, trucks and farm equipment for dealers from banks, NBFCs and insurance companies and lead generation for new cars. The company had acquired CarWale in 2015 and took a majority stake in Shriram Automall in 2018. While CarTrade runs its offline auction business under Shriram Automall, the lead generation (meant for OEMs) business is done through CarWale.

The regulatory filings further reflect that the company has raised fresh funds to generate long term resources for capital expenditure, expansion of the business and may foray into financing business as decided by the board.

Importantly, CarTrade has also passed a special resolution to change its name from MXC Solutions India Private Limited to Car Trade Tech Private Limited. The purpose of changing the company’s name could not be ascertained.

Entrackr’s queries sent to CarTrade did not elicit an immediate response. We’ll update the story in case when they respond.

The development comes at a time when CarTrade is reportedly planning to launch an initial public offering in 2021. According to a Moneycontrol report, the company has initiated preliminary discussions with advisors to launch an IPO in 2021 to raise around Rs 2,000 crore.

According to Fintrackr’s calculations,  the company’s current shareholding structure reflects that founder Sanghi and Family hold around 5.29% stake in the company. Early backers Temasek, Warburg Pincus (via Highdell Investments) and JP Morgan hold  24.73%, 32.16% and 11.14%, respectively. 

CarTrade competes with a clutch of companies including CarDekho, OLX and Cars24.