[the_ad id="83613"]

Used car platform CARS24 to buyback ESOP worth Rs 75 Cr

Second-hand car selling platform CARS24 announced on Wednesday that it would buy Rs 75 crore worth of shares back from employees under its ESOP plan. This single buyback constitutes more than half of the value of the amount the company has sold to employee shareholders so far. 

By the end of fiscal 2020-21, the company had turned into a unicorn following a $200 million Series E fundraise. A more recent $450 million round with Tencent and Softbank involvement gives the company a significant amount of capital to enter more cities and towns, at a crucial time when automobile manufacturers are cutting back production due to semiconductor shortages, and the automobile industry in general struggles to recover from a years-long crisis. 

The prospect of the company’s success is a tantalizing one, but is not without its risks. As Entrackr reported last December, CARS24’s operating revenue declined over the course of the pandemic. While the company made cuts to its supply-side businesses and did shrink losses, it’s notable that its operations overall shrank in a year rife with pandemic-related curbs on public transport. This stands in contrast with how the value of the used-car market ballooned during the pandemic in the United States, with vehicles actually increasing in value, a startling phenomenon for a used product. 

Investors like DST Asia and Alpha Wave Incubation have (as Entrackr reported exclusively) pumped in hundreds of millions of dollars in the apparent hope that a wider economic recovery will be accompanied by many Indians choosing used vehicles to save on costs. 

In the ongoing calendar year, around a dozen startups including Gramophone, Slice, TheMathCompany, Bizongo, LEAD, FarEye, HomeLane, Trell, Ninjacart and Porter have announced their ESOP buyback program. 

As per our data tracking platform Fintrackr, homegrown startups had bought back ESOP worth more than $440 million in 2021. The figure was close to $50 million in the previous year or 2020.

Entrackr is a new age media platform for entrepreneurs, startups and technology enthusiast Read More >

©️ All rights reserved Bareback Media Pvt. Ltd.

Send Suggestions or Tips