If you are thinking about trading off your old vehicle or buying a new one, you need to know which dealerships provide the best deals. The fear of getting stuck with a bad deal can make you hesitate. The COVID-19 pandemic caused a slowdown in business because of the nationwide lockdown. Many people now prefer to purchase used vehicles instead of new ones. One car-buying platform that has gained from this shift is Cars24 Services Pvt. The company is Based in Gurgaon, India, and it sells vehicles online. With The recent funding, it has emerged as The initial startup in the automotive sector to attain the unicorn valuation. The following are 20 things you didn’t know about Cars24.
20. It’s a technology platform
As a technology platform, Cars24 facilitates the sales and purchases of pre-owned vehicles in the span of one hour following a visit to one of its branches. Besides the payment, the platform takes care of the paperwork, such as RC transfers, and authorizes end-to-end transactions. Cars24 sells the vehicles online through its proprietary auction platform to enterprises across India that sell used automobiles. The platform has over 10,000 channel partners from more than 230 cities across India. It has over two hundred and ten branches across seventy cities. According to an article on Moneycontrol, Cars24 does about 15,000 transactions per month.
Vikram Chopra established Cars24 in 2015, and he is the current chief executive officer. He has a degree in both bachelors of technology and master of technology in Engineering from the Indian Institute of Technology in Bombay. He also has a Master’s of Business Administration degree in Finance from the University of Pennsylvania. Before establishing Cars24, he also founded FabFurnish. He also worked as an Investment Analyst at Sequoia Capital and a business analyst at McKinsey and Company for more than 2 and a half years. Mehul Agrawal is the other co-founder of Cars24. He is also the chief operating officer of Cars24. He obtained an MBA from the Indian Institute of Management in Calcutta. In the past, he worked with Boston Consulting Group. Before this, Agrawal had been a founder and managing director of FabFurnish, an online furniture firm. Gajendra Jangid is the other co-founder of Cars24. He also works as the chief marketing officer of the platform. Like Vikram, he also has a Bachelor’s and Master’s degree in engineering degree from the Indian Institute of Technology. Before becoming one of the company’s founders, Gajendra worked at Schlumberger for around nine years. The other co-founder of Cars24 is Ruchit Agarwal. He is also the company’s chief financial officer. He is a graduate of Cornell University and has been the vice president of Bank of America Merrill Lynch.
18. The disorganized used car market-inspired its founding
Before the founders established the concept of Cars24, the founders discovered that the pre-owned car market had been chaotic for a lengthy time. They noticed the significant degree of a breach in the supply and demand of this industry. There was no standard procedure for buying or selling used automobiles. The industry also did not have the technology required to determine a suitable car price. The other barrier was that it was difficult for sellers to facilitate a vehicle’s detailed appraisal. Both the buyers and sellers had to contribute a significant amount of effort and time to find a suitable deal. When Cars24 founders observed these discrepancies, they decided to adopt technology that would help them in resolving the issues and simplifying the entire procedure of buying and selling used vehicles for consumers. The founders believed in the promise that the used vehicle industry provided and had faith that their idea could create a revolution.
17. Business model
The platform focuses on a customer-to-business model. It buys vehicles from consumers and sells them to dealers in turn. Unlike a classified platform, the company simplified end-to-end transactions and charges a commission for each deal. The business model of the platform is Based on the criteria of buying vehicles from their owners at reasonable prices compared to other alternate Services and selling them at a profit. According to Analyticssteps.com, the platform focuses on providing Indian consumers with an easier and suitable alternative compared to other banal approaches of selling used vehicles to help make the procedure straightforward and smoother. It facilitates an assured price for every vehicle despite its age, condition, and model. Therefore, used car owners can sell them in one visit by visiting any of the platform’s branches. The firm has also ventured into the consumer-to-consumer model. In this car-buying model, the user chooses the vehicle to buy from the platform’s site or visits the closest branch of Cars24 to assess and test the vehicle. The company then delivers the car to the buyer following the payment in one hour or less.
Cars24 now sells 15,000 vehicles a month and in recent days, it has ventured into the pre-owned motorcycles section. In a period of fewer than 6 months of operations, it has made more than 3,000 deals. The platform obtained its NBFC license in 2019 through the Reserve Bank of India for its consumer lending business called Cars24 Financial services. The company started selling motorcycles after the lockdown and it has already sold over three thousand bikes in Delhi.
The company makes a commission from the sellers and buyers. Value-added Services are another essential revenue stream. The new vehicle ecosystem involves several things such as servicing, financing, insurance, and warranty. Cars24 makes money on those things.
14. Artificial intelligence
The company considers artificial intelligence to be essential. The reason is that it purchases hundreds of vehicles and models each month and no human can assess every vehicle perfectly. Car making is deeply specialized, and that’s why companies specialize in the type of vehicles they make. When it comes to selling used vehicles, it is vital to appraise vehicles in a scalable manner, and this means that you need to use data science. Millions of data points come in and how you make sense of it to get better is vital. Car24’s ability to predict the issues that a vehicle has and how it affects its pricing has improved.
13. Net revenue run rate and funding
The company’s net revenue run rate is fifty to sixty million. According to the founders, providing the best price and doing everything for the customer is what leads to success in car selling. In The most recent funding round, Cars24 has raised two hundred million dollars in a Series E fundraising rounded that DST Global headed. It also involved participation from existing investors, namely Moore Strategic Ventures, Exor Seeds, and Unbound. The funding has made the platform emerge as one of the most recent 2020 startup unicorns in the country, and its valuation has soared past one billion dollars. Before 2020, the startup obtained funding from MS Dhoni, The Indian Cricketer.
12. Professional assessment
According to Motoroids.com, C24 offers a detailed professional assessment of vehicles, and it includes the consistency of the thickness of the paint to determine if a vehicle has undergone repainting. The representatives at the company also inquire about other specific details about the vehicle like the documents available, and its state of finance, among other things. The company also handles RTO transfers for people who own outstation vehicles.
11. Customer service
To buy or sell a vehicle, you can visit the website of Cars24 or call a helpline number offered on the homepage. You then need to provide basic details such as year of make, registration number, fuel type, and variant so that the process can begin. After you are done, you will get a date and appointment time when you could visit the closest branch of Cars24 to have your vehicle inspected or have the car selling or buying process started. The branches are laid out well and designed to provide potential customers with a friendly, comfortable environment. They are laid out neatly, similar to office areas with televisions, reading materials, packaged mineral water, and refreshments for consumers. Several glass cubicles where the company’s representatives discuss specifics with customers are also available.
10. Car buying or selling process
When a vehicle is ready to be sold, many potential buyers bid for the vehicle simultaneously. It is all interesting for consumers because they can see the whole process in real-time. The bidders get a time window during which they place their highest bid on an automobile Based on their needs. When the time window ends, the system displays the highest bid for a vehicle. The bid value is valid for twenty-four hours after a vehicle is inspected. People who wish to take their time deciding need to have their vehicles re-inspected.
9. Protection of privacy
When examining vehicles, inspectors from Cars24 take images while concealing the vehicle’s registration plate to protect the owner’s privacy and the age of the vehicle. After displaying a car’s final price, the reasoning and logic behind its price are also displayed. In the opinion of Bloombergquint.com, factors such as model demand, brand, and changing market dynamics are also considered and duly mentioned so that the current owner is sure about every detail.
8. Reaction to pandemic
After the imposition of the first lockdown, there was a recession. The company’s managers resumed studying what occurred during the previous recessions, and theories existed that supply-led shock could occur. It would be more detrimental than a demand-led shock since if there is no supply, demand could wither away. The company examined US-listed firms that have experienced many cycles of bust and boom. It took them eighteen months to recover from the downturn. Throughout the lockdown, they brought additional mechanization into the enterprise. As the month of June ended, the lockdown was over, and they began seeing lots of demand right away.
7. The company does not care much about getting traffic
The founders of Car24 state that the company’s growth is based on conversion rates, and they do not make money just by attracting customers to their business. Yet, the company has built traffic without having to launch a media platform, running games, or making advertisements on television. For the company, traffic comes before transactions by a number of months since consumers take time in buying and selling vehicles. Traffic is an indication of the potential customers the company might have, but it does not work towards it. It does not optimize its websites for traffic.
6. It reconditions vehicles
Cars24 reconditions vehicles for its own transactions, but it plans to open it up to any vehicle. It plans to perform reconditioning as a separate business vertical for individuals who haven’t purchased a vehicle from the firm. The point is to do everything for the customer. The customers do not have to decide where to go for certain things. Consumers love buying goods and services from companies that do everything for them as long as transparency and trust exist.
5. It mostly sells hatchbacks
The company sells more hatchbacks in India because that is the way it is set up. In India, twenty in 1,000 people own vehicles. In Indonesia, there are two hundred vehicles per a thousand people. Cars in India are fewer because of reduced income per capita. More hatchbacks exist because anyone who moves from a motorcycle to a vehicle has the money required to purchase a hatchback.
4. It partners with banks to provide car loans
Car24 claims that out of the ten customers who come to them, about seven to eight request a loan. However, the company has to do a lot to serve the consumers, and it has to be careful. The company must assess customers quickly, partnering with banks, and tracking the vehicles, among other things. There is a great demand for loans, but collecting loans is difficult. Many consumers usually want to finance about seventy to eighty percent of the vehicle’s value.
3. It is known as Carvana in the U.S.A
In the United States, Car24 is referred to as Carvana, an online dealer of used vehicles that has a market capitalization of $27.7 billion. For that reason, foreign investors are comfortable putting their money in Cars24. According to Business Insider, The firm has also started to operate in the Middle East, the United Kingdom and Australia. The other areas it operates in include Abu Dhabi, Sharjah, and Dubai.
2. Future plans
The company intends to expand across Asia and provide its customers with a hassle-free selling experience. More than 10,000 channel partners are registered on Car24’s platform, and it intends on increasing its network to over 20,000 partners over time. Car24 also said that it has actively launched operations in most Tier 2 and Tier 3 cities.
1. Pre-owned vehicle ecosystem
When it comes to systems of selling used vehicles, companies can use lead generation, which involves generating leads for consumers, and the other is a transaction-based model. Cars24 uses a transaction-based model where it does everything for the consumer. Even though this method of selling vehicles is more difficult, it is quite valuable, and this is why the firm has a ninety percent market share across all the vehicles sold.