Used car retailer CarDekho has raised $250 million as a part of its latest Series E financing round, driving its valuation to $1.2 billion and making it the newest entrant to India’s unicorn league.
The round, which the company described as a pre-IPO one, was a mix of equity ($200 million) and debt ($50 million) financing, was led by private investment firm LeapFrog Investments.
Mirae Asset, Canyon Partners, Franklin Templeton, Harbor Spring Capital and existing investors Sequoia Capital India and Sunley House also participated in the round.
The company said it will use the fresh funds to expand its used car and financial services businesses. According to the company, it is also looking to expand its catalogue to over 10,000 cars in the near future.
With this, CarDekho becomes the third startup in the used car retailing space to achieve unicorn status, following the likes of Cars24 and Droom. Spinny is also all set to become a unicorn as the company is in late-stage talks to mop up $250-300 million from new and existing investors. Entrackr had exclusively reported this.
Over the last few months, CarDekho has shut down a number of its stores—Gaadi by CarDekho—across the country as it makes a move towards purchasing cars post a home inspection, a move the company believes is a more efficient business model for them owing to the impact of the coronavirus crisis.
Entrackr was the first to report this.
Overall, CarDekho is the 33rd startup to attain unicorn status in 2021 alone. IPO-bound fintech startup MobiKwik reportedly became a unicorn on Tuesday after a secondary ESOP sale round led by former Blackstone India head Mathew Cyriac.
Last week, cloud kitchen brand Rebel Foods turned unicorn following a $175 million investment. Before that, crypto exchange CoinSwicth Kuber entered the unicorn club with a $260 million round. Fresh meat and seafood brand Licious also made entry into the coveted club this month.
How the used cars space is cruising
CarDekho’s key rival Cars24 recently raised $258.6 million from eight investors including Tencent (via its Europe based special purpose vehicle or SPV: Zennis Capital BV) and DST Asia, among others at a $1.75 billion valuation. Entrackr had exclusively reported this.
The used cars space has turned out to be an attractive segment for venture capitalists and late-stage investors. Droom had claimed unicorn status in July with up to $200 million round while pure-play etailer Spinny had nabbed over $100 million in a Series D round led by Tiger Global.
CarTrade, one of the early players from the segment, made its debut on the stock exchange in August. On the lines of the Vinay Sanghi-led company, Cars24 and CarDekho may explore fundraising via public markets. SoftBank-backed Ola also had thrown its hat in the used car space with Ola Car. It‘s currently running pilots across several cities. Entrackr had exclusively reported about Ola Cars in July.