A leading used car marketplace in India tackles the problem of trust with an acquisition
e the problem of trust, especially for used cars.
In India, most used cars come without a credible paper trail on vehicle quality and usage, unlike in more developed markets. Hence the need to look under the hood for defects.
Here’s where Adroit’s resources and credentials could come in handy. It was founded in 2005 by three entrepreneurs – Himanshu Lohiya, Mukesh K Gupta, and Puneet Tyagi – who had earlier worked on insurance and valuations for global firms like CB Richard Ellis.
“This acquisition addresses a crucial challenge – the ability to inspect vehicles promptly across the spread of the country,” says Ravi Mehra, president of CarTrade. “It not only enables efficient used vehicle transactions but is also the core for supplementary propositions, which includes re-finance, warranties, and insurance. The collaboration will help execute over 1 million physical inspections and valuations in the current fiscal year.”
Singapore-based Temasek and global investment firm March Capital had pumped in US$145 million into CarTrade last year. CarTrade was founded in 2010 by Vinay Sanghi, a former CEO of Mahindra First Choice. Another founder-director is Rajan Mehra, former country head of eBay India.
In a phase of consolidation in the used car space towards the end of 2015, CarTrade acquired Carwale, while its archrival CarDekho acquired ZigWheels. It had also acquired another portal called Gaadi from the Ibibo Group earlier. Another well-funded rival is Droom, while classifieds portal Quikr also has a used cars vertical.
New players continue to emerge, however, with different propositions to solve the problems in this disorganized space. One of them was the promising peer-to-peer marketplace GoZoomo, which had to shut shop when it found that the market wasn’t ready yet for this model.
While CarTrade focuses more on transactions, its twin portal Carwale is community-oriented with information and reviews. CarTrade claims to get 35 million visits a month for the two portals combined.
But the size of the leading players doesn’t stop others from entering what is estimated to be a US$125 billion Indian market in used cars. Just a couple of months ago, Xiaomi boss Lei Jun’s Shunwei Capital pumped US$3 million as a follow-on to a series A round for fledgling Mumbai-based used car marketplace Truebil.
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