Cars24 Nears $1 Billion in Sales, Reports Surge in Revenue
- ByStartupStory | January 23, 2024
Cars24, a Delhi NCR-based unicorn, has witnessed a significant surge in its financial performance, with its sales inching closer to the $1 billion mark in the fiscal year ended March 31, 2023. According to the company’s financial report, its consolidated operating revenue jumped by 16% to $930.3 million in FY23 from $799 million in the previous fiscal year.
Founded in 2015 by Vikram Chopra, Gajendra Jangid, Ruchit Agarwal, and Mehul Agrawal, Cars24 operates as a platform for buying and selling used cars. The company primarily generates revenue through the sale of cars, in addition to earning from car delivery charges, parking fees, and other related services.
Including other income, Cars24’s total revenue surged by 18% to $946.9 million in FY23 from $803.6 million in FY22. Moreover, the company managed to narrow its net loss, which declined by 32% to $168.3 million in FY23 from $248 million in the previous fiscal year.
Despite its strong financial performance, Cars24 kept its total expenditure flat at around $1 billion during the fiscal year under review. The company’s procurement cost, which accounted for 74% of its total expenditure, remained nearly unchanged at $806 million, compared to $797.1 million in FY22. This stability in procurement cost was attributed to the startup’s decision to close its operations in Saudi Arabia and Indonesia during the year.
Furthermore, the company’s employee benefit expenditure rose marginally by 2% to $93.6 million in FY23 from $92 million in the previous fiscal year, despite laying off around 600 employees and witnessing several high-level exits. Additionally, Cars24’s advertising expenditure decreased by 20% to $43.7 million in FY23 from $54.3 million in FY22.
Compared to its rivals in the Indian used-car marketplace, Cars24 has maintained a significant lead in terms of total revenue. CarDekho group reported an operating revenue of INR 2,331 crore ($284.2 million) in FY23, while CarTrade saw its operating revenue rise to INR 363.74 crore from INR 312.72 crore in the previous year, reporting a profit of INR 40.3 crore during the year.
During the COVID-19 pandemic, the used-car marketplace witnessed a surge in demand, leading to a unicorn status for companies like Cars24 and Droom. Despite a temporary slowdown post-pandemic, Cars24 ventured into the car financing space with Cars24 Financial Services, which reported a revenue of $3.1 million in FY23, marking a 181% increase from the previous fiscal year.
Although Cars24 had plans to go public after converting into a public entity in 2021, it shelved its IPO plans due to economic slowdown and volatile market conditions. The startup, which was last valued at $3.2 billion, has attracted investments from major players like SoftBank, DST Global, Alpha Wave Global, and Commercial Bank of Dubai, raising over a billion dollars in funding to date.
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