When Spinny raised $ 283 million earlier this month, it had more than doubled its valuation to $ 1.8 billion in just 6 months. Likewise, Cars24 saw its valuation jump 60% to $ 3.3 billion in just 3 months in December. CarDekho raised $ 250 million in October, including $ 200 million in Series E capital and $ 50 million in debt in its pre-IPO cycle, while Droom closed the first stage of its growth funding cycle pre-IPO pending up to $ 200 million.
According to a recent study by OLX Auto-Crisil, the country’s used car sales will almost double to 7 million units in 4 years, from just under 4 million units in FY21. The segment is estimated to close FY22 at just under 4.4 million units. “The used car market will reach 10 million vehicles by fiscal year 30 at a CAGR of 14%. How many segments can this type of growth promise? Since only 6-8% of these resources are currently digital, “a large chunk of the funds will go to digitize a larger part of the ecosystem,” said Amit Kumar, CEO of OLX Autos.
Unicorn startups are already adding workforce and markets as they expand their technology infrastructure. Spinny Founder and CEO Niraj Singh said: “We are present in 13 cities and we will expand to 25 cities in two quarters and we have grown from 40 employees in our technical and product team to 200. We are investing in Increase . ”“ We are strengthening our presence in Australia, Thailand and the Middle East and we will use these funds to continue our international expansion, ”said Vikram Chopra, Founder and CEO of Cars24.
Fundraising valves and unicorn assault mean that market leaders are also stepping on gas. Mahindra First Choice Wheels, which has 50% of the organized used car market. Its CEO, Ashutosh Pandey, said, “We are planning a fundraiser to increase our lead in retail. Auto experts say that optimism about used car investments is more forward looking. “Used car investments are like FOMO – people think they will be shut out of the next bull run,” Pandey said. “What has happened with cell phones over the past 10 years will also happen in used cars.
The pandemic and the chip shortage are tailwinds for new cars, but the long waiting list has prompted consumers to turn to used cars. This is a growing category globally, where the ratio of old to new is 3: 1, while in India it is 1.5: 1 and growing rapidly. Added Vikram Chopra of Cars24.