CarTrade Raises $145 Million Amid India’s Thriving Used Vehicle Market

CarTrade, a classified site for car dealers in India, has raised $145 million in new funding, marking the second largest investment in an Indian listings startup. The round was led by Singapore-based investment company Temasek and March Capital, with participation from returning investor Warburg Pincus.

The money will be used to fund the acquisition of rival CarWale from German media conglomerate Axel Springer and for further product expansion by the two companies. Classified site Quikr is the only Indian startup to have raised a bigger round, with $150 million last year, and the latest fundraising by CarTrade is the largest ever for an online portal that is focused on specific sectors such as automobiles and real estate.

“India is an important market for us,” said Ravi Lambah, Temasek’s co-head for India. “It has certain structural advantages which include favorable demographics, increasing urbanization, and strong consumption trends. The online auto industry is a good proxy for the needs of transforming economies and growing middle income populations, both of which are part of our investment themes.”

There are currently more than 225,000 listings for used cars on CarTrade’s sites and they are used by 10,000 new and used dealers, with a total of 32 million monthly visits. Founded in 2009, CarTrade claims it is now India’s largest car classifieds platform following its CarWale acquisition.

“This investment is a validation of CarTrade’s business model and growth plans in the Indian online auto space,” said Vinay Sanghi, founder and CEO of CarTrade.

The valuation of CarTrade could not be determined in the new round. In October 2014, the company announced its previous round of $30 million, which valued it at $100 million.

“These are exciting times for us as the e-commerce sector is at a broad confluence of multiple macro trends,” said Mohit Dubey, CEO of CarWale. “CarTrade has developed a unique and world class platform for transacting in new and used vehicles. A leader in its segment, it has steadily expanded its offerings across India and today has an extremely strong network of dealer partners with a rapidly growing user base.”

According to auto industry executives, the action in India has shifted to used cars, with the market now reaching $125 billion, of which 1 percent is marketing by dealers.

“New cars is done and dusted, but used cars is where a battle royale will take place with multiple large business opportunities in classifieds, dealer services, auctions and peer-to-peer services,” said Umang Kumar, president of CarTrade’s primary rival, CarDekho, and CEO of Gaadi.com.

In addition to CarDekho, other firms that are riding the used car wave include smaller companies that offer specialty services, such as car inspections, including Gozoomo and Spinny.