Exclusive: Cars24 backers and co-founders offload shares worth $20 Mn in secondary deals

Cars24 became the first unicorn from the used car and bike space when it raised a $200 million round led by DST Global in November 2020. Meanwhile, as it is all set to score a new round led by Falcon Edge, Cars24’s early backers and co-founders have offloaded $20 million worth shares across two secondary deals since December.

According to the company’s multiple filings in Singapore, its early investors MPGI Holdings, Asia Venture Group and Siegfried Trust offloaded shares worth $8.5 million, $1.5 million and $180K to DST Asia in December. 

Four months later, co-founders Mehul Agrawal, Vikram Chopra, Ruchit Aggarwal, Gajendra Kumar Jangid collectively received bonus shares summing up to $36 million from the company. Its early backers Sequoia, MPGI Holdings and Indian Continent Investment also received shares valued at an aggregate $11 million during the same month.

Cars24’s brand ambassador and former captain of the Indian cricket team Mahendra Singh Dhoni was also allotted shares worth $463K for his services.

Following this allotment, a second wave of secondary transactions took place where four co-founders sold $10 million worth of shares to DST Asia in July. Mehul sold shares valued at $5.01 million to DST and Vikram has transferred $1 million worth shares to the Hong-Kong-based investment firm. 

Ruchit and Gajendra have offloaded shares adding up to the value of $2 million each to DST Asia.

Importantly, Tiger Global’s partners Scott Shleifer and Griffin Schroeder had also invested in the company in December last year. Their collective stake worth $2 million was bought back by the company last month.

Cars24 used to only buy cars on behalf of dealers until 2019. But over years, the company diversified into selling it to retail customers and now directly competes with the likes of CarDekho, Spinny and Droom.

The company also entered the used bike segment in 2020. Early this year, it forayed into the Australian and UAE markets and set aside $100 million to expand its footprint in the Middle East and SEA countries.

Apart from its startup peers, Cars24 also competes with some of the legacy companies such as Mahindra First Choice, Maruti True value in the organised used car retailing space — a segment that is expected to grow at a CAGR of 15.12 % between 2020-25 from $24.24 billion in mid-2019.

As for the company’s financials, according to Fintrackr, Cars24 had recorded 82% growth in its operating revenue to Rs 1,687.8 crore in FY20 from Rs 1,687.8 crore in FY19. It also controlled annual losses by 12% to Rs 285 crore in FY20 from Rs 325.7 crore.