The Covid-19 pandemic has significantly impacted the global economy, and the automotive industry is no exception. With public transportation being a potential hotspot for infections, many individuals opted to purchase personal vehicles for safer travel options. This trend has caused a significant surge in automobile sales throughout 2020 and 2021, with both new and used cars experiencing high demand.
According to data from the Federation of Automobile Dealers Associations (FADA), passenger vehicle sales in India reached 279,745 units in February 2021, representing a 23.19% increase compared to the same month in the previous year. Similarly, the used car market in India has also seen substantial growth, with the market expected to reach a value of $50 billion by 2025.
As new car deliveries faced delays due to supply chain issues, many buyers turned to used car platforms such as Cardekho, which has been operating online auto-purchase for several years. The company has seized this opportunity, with its revenue from operations rising by 20% from Rs 706.3 crore in FY20 to Rs 884.4 crore in FY21. This growth can be attributed to the surge in demand for used cars and the company’s efforts to expand its offerings and improve its customer experience.
CarDekho: The Success Story
Despite the entry of numerous startups in the used car or pre-owned market in India, very few have been able to provide a comprehensive end-to-end solution for customers. However, CarDekho has positioned itself in this niche with ease.
CarDekho is a platform that offers a wealth of information about the automobile industry, enabling users to make informed decisions when purchasing a vehicle that fits their budget and requirements. From conducting research and reading reviews to completing a successful purchase, CarDekho guides the user seamlessly through the entire process, resulting in a satisfied customer. In short, CarDekho provides a one-stop solution for all your car-related needs in India.
CarDekho Company Detail
Let’s have a look at Cardekho company details first before we see how it achieved success in a span of 14 years. CarDekho.com was set up in 2008 with an impressive investor list that included names like Google Capital, Tybourne Capital, Hillhouse Capital, Sequoia Capital, HDFC Bank, Ratan Tata and Times Internet. The company’s total funding is $497.5 million, and its valuation is $1.2 billion. The parent organisation for CarDekho is Girnar Software Private Limited.
Meet The Founders – Cardekho.com
CarDekho is the brainchild of two brothers, Amit and Anurag Jain, being the product of GirnarSoft. While Amit Jain is the CEO and Co-Founder, Anurag Jain wears the mantle of the COO and Co-Founder at CarDekho. Both the co-founders are IIT-Delhi alumni and have an experience of more than 8 years in the corporate world with tech companies.
Cardekho founder & CEO Amit Jain, an alumnus of IIT Delhi, began his career at Tata Consultancy Services after completing his B Tech degree. After working for just over a year, Jain became the Product Manager at Trilogy, where he honed his skills before eventually co-founding GirnarSoft, where he now serves as CEO. Jain is also a shark on the new season of Shark Tank India, a popular show that features entrepreneurs seeking funding from successful businesspeople.
Anurag Jain, another IIT Delhi graduate, holds an Integrated Master of Technology in Mathematics and Computing. Prior to joining GirnarSoft as COO and co-founder, Jain worked as a Senior Systems Consultant at i2 Technologies and later as a Senior Operations Research Analyst at Sabre Holdings.
A Look at the CarDekho Team
Along with the co-founder duo, Umang Kumar has also been the co-founder and President of CarDekho since the company acquired Gaadi.com. Other members in the company’s management include Mayank Gupta (CFO), Manish Wadhwa (CPO), Umesh Hora (SLT Member, South East Asia), Mayank Jain (CEO, New Auto), Namit Jain (CEO Financial Services ), Ankit Agarwal (CEO, Insurance), and Sharad Saxena (CEO, Used Cars).
How CarDekho was Born
CarDekho’s story started when the two brothers left their corporate job for personal reasons and returned to their hometown. Instead of joining their family company, they established their own, doing what they were best at. GirnarSoft, an IT contracting business, was born due to this. Initially, the work entailed sending emails to entice more notable clients to join.
After a barrage of emails and thousands of phone calls, they eventually secured their first customer, which didn’t generate much income for the business but did lead to other more significant business ideas and a chain of references. CarDekho was founded in 2008 after the business accumulated money and expanded its workforce. Despite the fact that CarDekho had been launched, Girnar Soft maintained its IT consultancy services because they were the major source of revenue at the time.
CarDekho: Business Model
CarDekho is among the leading car search platforms in the country that helps users buy used and new cars that fit all their requirements. The website and the user-friendly app contain massive automotive content such as detailed specs and prices, expert reviews, and comparisons for price and features, along with videos and pictures of all car brands and models available in India. CarDekho has tie-ups with leading auto manufacturers, more than 4500 car dealers and several financial institutions to purchase vehicles more accessible.
The revenue model for CarDekho
- Car purchases- CarDekho buys cars from the users of its platform to sell them to used car dealers across India. This vertical accounts for 55.3% of the total operating revenue.
- Revenue earned from advertising and digital marketing solutions to OEMs and dealers. It is an impressive 27.8% of the company’s operating revenue.
- Sponsorships – The company earns sponsorships where they post sponsored posts, events, links etc.
- Affiliate Marketing
- Commissions – They receive a commission from the suppliers and Manufacturers as per the sales of used cars.
- Lead Generation – CarDekho charges commission from the used car dealers for sending them the leads of the users as per the requirements. The transaction facilitation service of selling cars to end users on its platform generates commission from these sales, accounting for 12% of annual revenues.
- Car Insurance – The insurance brokerage vertical of CarDekho sells insurance to users on its platform and this brokerage generates almost 3% of its annual revenues.
- The company also earns revenue through call centres and software development.
CarDekho’s used-car selling platform purchases vehicles from its users and subsequently sells them to dealers throughout the country, generating revenue. In FY21, this particular vertical experienced a 67.4% increase, resulting in approximately Rs 489 crore in revenue for the company, up from Rs 292 crore in FY20. The table below shows CarDekho’s complete revenue breakdown for FY21 and its comparison to the previous fiscal year, including the sale of used cars to dealers, advertising and digital marketing, a commission from car dealers, insurance brokerage, and other operating income.
CarDekho: What’s New and Exciting About It
The latest feature introduced by CarDekho is the Feel The Car tool which gives a 360-degree interior/exterior view of the car complete with sounds and explanations about its features through videos. This gives a greater understanding of the features of a specific vehicle. Users can now search and compare cars by make, model, price, and features.
There are attractive live offers and promotions for users in all cities. At CarDekho, users can also browse through used car classifieds, where they can upload their cars for sale and find used cars for buying from used car dealers and individuals.
The company has a host of tech-enabled tools for OE manufacturers and car dealers. There are apps for dealer sales executives to manage leads, cloud services for tracking sales performances, a virtual online showroom, call tracker solutions, digital marketing support, and outsourced lead management operational processes that create a seamless path for the users: from inquiry to sale.
The Drive Ahead for CarDekho
Rupyy, a specialised financial services platform by CarDekho will offer a whole new range of financing alternatives to the customers and retailers of automobiles. With Rupyy, CarDekho aims to enter the field of meeting the auto-financing requirements of its customers, providing them with easy and convenient methods to apply for and get approval for their loans. Rupyy is designed to be an end-to-end digital platform that will make the auto-loan process smooth and hassle-free for customers.
Buying a used car today is just a click away. With the advent of online web portals, buying or selling a car anytime, anywhere has become extremely simple. CarDekho is working on building a profitable business model. But there is so much to be done still. With new categories like EVs emerging, the company needs to keep scouring for fresh opportunities in the used-car segment.
From being a startup, CarDekho founder Amit Jain is now a shark himself in Shark Tank India, and is “excited to see how India is changing”. Jain was seen offering “Rs 5 crore for 5 per cent” to a startup on the show. “I’ve invested across sectors from auto to education to cloud kitchens to F&B. Shark Tank India gave me a chance to learn a lot about other sectors beyond our core business,” said the Cardekho co-founder who turned around the used car segment in India.
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