Entering The Unicorn Club A Celebration Of Company's Efforts: CARS24 Co-founder
Valued at $1.8 billion, CARS24 plans to expand its global presence and further build its cars, bikes and financing business in India
In November 2020, CARS24 raised $200 million in a Series E funding round at a valuation of over $1 billion. With that, it became India’s first unicorn in the auto segment, making it a big milestone for the company. “This achievement is all the more special as we entered the coveted unicorn club during the pandemic times,” Gajendra Jangid, co-founder and CMO, CARS24, told Entrepreneur India.
Jangid believes that attaining the unicorn status is definitely an advantage for the image of the company and a celebration of the company’s efforts in transforming the way transactions happen with respect to pre-owned vehicles in India. “Traditionally, car selling or buying has been a tedious process, however, over the last five years, we have strived to transform the customer’s journey ‘the CARS24 way’ that is, hassle-free, safe and transparent. Our aim is to sustain this momentum of building trust, being transparent and providing our customers with a smooth customer experience always,” he added.
From Ideation To Unicorn
The idea for a used-cars platform came to Vikram Chopra, co-founder and CEO, CARS24, after experiencing the tedious, tiresome and never-ending process of selling his car before temporarily settling in the US. In 2015, the leadership team came together and started charting the plans of solving the pain points of the used car industry, which was then around a $50 billion industry, now a $100 billion industry which is expected to grow at a CAGR of 10-15 per cent this decade.
Though the startup was launched in August 2015, all the founders started working on this idea a few months prior. While Chopra and Mehul Agrawal were seasoned entrepreneurs, Ruchit Agarwal and Jangid had left their well-paying MNC jobs to start their entrepreneurial journeys. “We were excited as well as nervous when we began this journey. This very much felt like the beginning of a roller coaster ride,” said Jangid.
The first problem that the founders decided to solve was the unorganized nature of the Indian used car industry. And hence, they started as a born-digital company and identified the benefits of e-commerce. Then, the other problem at hand was to solve for supply.
CARS24 thus started as an e-commerce platform for pre-owned autos (cars and bikes). For a long time, it focused on organizing the supply side and operated in the consumer-to-business ecosystem solving the pain points of sellers and passing on the cars to its channel partners who would then sell the cars to end buyers. Today, the company also focuses on the end consumers and offers a 100 per cent online journey of discovery through a wide assortment and a detailed condition report, including contactless financing options and doorstep delivery of cars.
“Our efforts have always been directed towards providing customers with an efficient, reliable, and trustworthy platform for all their needs and requirements. We are committed to the vision of making the pre-owned car buying as straightforward as buying a smartphone online from Amazon,” explained Jangid. The company’s gross revenue in FY 20 was INR 3065 crores and loss was INR 277 crores.
Challenges And Early Mistakes
However, the success didn’t come that easy and there have been various learnings for the cofounders. “Each year, since our inception, we have faced challenges as an industry- 2016- demonetization, 2017- GST, 2018: the collapse of IL&FS, 2019: migration from BSIV to BSVI engines and 2020: the pandemic. Yet, we are pioneering the online vehicles buying culture in India, became a unicorn and are now a global company. And we attribute this success to our stakeholders, partners, investors and most importantly our employees,” said Jangid.
The pandemic has, however, turned out to be a blessing in disguise for the startup as more and more people today prefer personal vehicles over shared mobility. In comparison to pre-Covid levels, CARS24 website traffic has increased 4X, claims the startup. “Through the course of the pandemic, we have propelled ourselves to understand and adapt to the changing digital atmosphere. For example, data-driven marketing has helped us gather real-time consumer insights. Therefore, being digitally transformed and at the forefront of technology is an essential part of the learning curve during a pandemic,” Jangid added. He added that a car is now a growing necessity for a large part of the working segment.
Talking about what motivates him and his cofounders to keep going despite multiple challenges on the way, Jangid said, “We have never let our dreams and targets define us. We set up an objective to become the world's largest auto-tech company and everything else is a landmark achievement and a step closer towards this larger goal. The commitment each stakeholder- be it an employee, a dealer, a customer or an investor- has shown by vesting their trust in us, motivates me the most as an entrepreneur.”
CARS24 is a team of 6500+ members and each individual, Jangid said, is aligned with the company’s vision of creating the ‘best in the industry’ customer experience.
Key Milestones And Road Ahead
Other than attaining unicorn status, the cofounders are proud of two notable milestones that are close to their hearts. “Being a startup, there is always that question of ‘what if? Even the slightest of reassurances matter the most in the early days. One of the most memorable moments for us as a young startup was the moment when we were awarded the Most Innovative Startup of the Year by Entrepreneur India in 2019,” Jangid said.
Another key milestone in its journey was when the company secured the NBFC license from RBI. “We became the first startup in the used car industry to have an NBFC license.To be able to provide easy loans at low interest for our customers and channel partners through this license truly falls in line with our customer-centric philosophy,” he added.
“These milestones are not only achievements to treasure but reminders that no dream is too small. And that the best is yet to come!,” he added.
Talking about future plans, Jangid said that CARS24 will expand its global presence as well as further build its cars, bikes and financing business in India while continuing to invest in technology and data sciences that deliver the best customer experience possible.
The Indian vehicle market is still at a nascent stage and underpenetrated in comparison to its counterparts of developed markets. In India, car ownership stands at a meager 2 per cent, creating a huge opportunity for the auto industry. Plus, the traditional way of buying cars is often time-consuming, inconvenient and stressful. This, along with the shift towards personal and cheaper cars in the post-pandemic world, has opened up huge opportunities for CARS24 and other startups in the space.
Shanthi specialises in writing sector-specific trends, interviews and startup profiles. She has worked as a feature writer for over a decade in several print and digital media companies. She is also a mom who looks forward to playing a game of cards with her tween daughter every evening after work.