Ever since cars went from luxury to necessity, people have been hit by a conundrum of all the ‘which’ questions. Which car to buy, which feature to prioritise, which company to go for, which dealer to choose from and so on. The situation becomes even more challenging when it is coupled with the term ‘pre-owned’, both for buying and selling. Overall, it’s a tough ride.
In 2008, a brother duo – Anurag and Amit Jain – decided to bridge this gap with the inception of CarDekho – a web portal that deals with anything and everything related to automobiles, including buying, selling, reviewing and financing. However, it wasn’t a cakewalk for the two IIT graduates, who placed their passion over the shared aversion of getting into the family business of jewellery.
After a few ‘speed bumps’ and a lot of hard work, they managed to turn CarDekho into one of the biggest brand names in the automotive e-commerce business, with a valuation of over $643 Million.
Failure, Inspiration and Investment
The journey of entrepreneurship for the Jain brothers had commenced in 2006 after they left their respective jobs at TCL and Trilogy as they learned about their father’s illness. The idea was to join the family’s jewellery business, however, they decided to choose a different path and start something of their own. Varied ideas, starting from taking the jewellery business online to an astrology portal, were curated, brainstormed and quashed. After a series of thoughts, the duo stumbled upon the idea of doing what they were best at – software services/IT – and launched GirnarSoft, an IT outsourcing company.
Soon the bedroom was turned into the office and the brothers commenced operations with big hopes. After thousands of emails and calls, the duo realised that the results were not worth the efforts as they were unable to touch base with big clients and get the expected results.
They decided to start small. Their first project fetched them Rs 50,000, which was much less than what they had hoped for. However, as challenging as it can be to be patient, it is one of the most important traits for any start-up. Besides, hard work never goes in vain. Having said that, do not misinterpret between patience and rest. Don’t take rest and fool yourself by saying that I am patient. This is exactly what the brothers did.
Amidst the frustration of not reaping expected results, a chain of references had started to build up for the start-up, bringing in new projects and clients. Within a year, the company had 40 employees and enough capital to be reinvested.
However, instead of putting their entire money back into the business, the duo decided to place their bet on a new idea, which came in from the duo’s shared interest and a visit to an international expo.
Digitisation was the key. The aim was to make buying and selling of an automobile a hassle free process besides streamlining the unscathed market.
While thinking about the new venture, what convinced the brother duo was their visit to the International Auto Expo. The sheer experience of reviewing, comparing or just having a look at the options available at one place hit them up with the idea of having the same online.
The money made out of the IT business was reinvested in launching Cardekho in 2008, with GirnarSoft as the parent company.
“Cardekho has quickly moved up as one of the premier platforms for automotive e-commerce in India thanks to the company utilising digitisation so well.”
Going beyond a Web Portal
A few years later, CarDekho found itself surrounded by competition. It was being challenged by companies like CarTrade, Droom Technology, CarWale and many more. However, to remain at the top of its game, since the very beginning, the company had made innovation in its bible.
CarDekho aspires to give its user an immersive car experience before it visits the dealer showroom. It has launched a variety of features, including the ‘Feel The Car’ tool that gives 360-degree interior/exterior views with sounds of the car and explanations of features with videos; search and comparison by make, model, price, features; and live offers and promotions in all cities. Besides the consumer product features, the portal provides a rich array of tech-enabled tools to OE manufacturers and car dealers. These include apps for dealers, sales executives to manage leads, cloud services for tracking sales performance, call tracker solutions, digital marketing support, a virtual online showroom, and outsourced lead management operational process for taking consumers from inquiry to sale.
The company acquired ibibo group-owned Gaadi.com in 2014 and gradually launched BikeDekho, PriceDekho, MobileDekho, and many other platforms that combined get more than 55 million unique visitors monthly. According to a BCG study, over 85% of customers who intend to purchase a car in India, visit one of CarDekho’s platforms before making the decision.
Following the acquisition of Gaadi.com, CarDekho became the undisputed market leader in the automobile industry with a collective volume of 15 million visitors monthly. Apart from this, the deal helped the company evolve in the pre-owned car market which otherwise would have taken years had they done it by themselves.
Strategic acquisitions were done to enhance the user interface of the website and apps by using big data and AR/VR technologies besides other offerings.
While CarDekho took over Times Internet-owned Zigwheels, CarTrade acquired Carwale. Continuing its acquisition spree, CarDekho later folded up six companies including Volob, SaaS startup Connecto and roadside assistance Help On Wheels.
By 2016, CarDekho had realised that it was lagging behind in the used car segment and began doubling down on it. However, by the time the decision was made, its competitors like Cars24 had already made inroads in the segment.
The strategy of monetising the user base was pivoted a bit by introduction of finance and insurance verticals (value added services). This was the evolution of CarDekho from an autotech to auto fintech. The company got into the lending segment, an huge untapped opportunity, especially in the used car segment. Loan discovery and processing became an integral part of CarDekho’s used car ecosystem and a huge revenue making vertical. Besides bringing down the loan processing time, the company tied up with BankBazaar.com and Berkshire Insurance to enhance the offering.
Very few players in the market have been able to match CarDekho’s in-depth knowledge and expertise with regards to used car loan underwriting. This works as a huge advantage for the company which has already captured a significant user base in this vertical.
Taking into account the company’s revenue models it has three mediums; the first and the most talked about has been their revenue through AdSense, the second and the most important source is through sponsored ads, and last but not the least is the commission from the manufacturers and dealers.
The company has been grabbing the right opportunities for growth and expansion to expand its revenue. The zeal to constantly grow is the key reason for the company’s success and also the reason behind being able to survive in an ocean full of competition. By developing capabilities in finance and insurance of used vehicles, it has managed to build a unique value proposition.
An Early Entrant
CarDekho was indeed one of the early entrants in the autotech space. This gave the company the required space to grow and experiment. However, it also came with the disadvantage as the start-up had to shoulder the entire responsibility of setting the base for the market, especially convincing the clients/customers. This set the start-up up for a slow start, but a steady one as they began gaining recognition.
After a first few scrappy years, the company finally exploded when it grabbed the attention of investors in 2013. This was the year when the company was engaging in a multimedia marketing campaign with the help of its 200 employees.
Impressed by the company’s marketing strategy Sequoia Capital invested $15 million in the initial round of funding. Not only this, through the help of its innovative marketing campaign CarDekho managed to get a place in the market and it soon became a household name.
Since 2013, the company has never stopped flying, it has been actively receiving new fundings and setting new benchmarks every year. According to the brothers, 2015 was most certainly a golden year for the company which raised $50 million in its Series B funding from Hillhouse and Sequoia Capital besides gaining Tata Group’s trust. This was also the year when the company claimed to have hit 10 million unique visitors and raised its valuation five times to a whopping $300 million. These investments in the next few years were repeated by companies like HDFC, Google Capital, etc.
“The car platform has been so successful and received so much funding, that the company is looking to make a strong foothold for itself in the two-wheeler industry as well.”
At Top Of The Automotive E-Commerce Business
CarDekho has reported a valuation of $643 million in 2020. Irrespective of being hit by the pandemic, where the automobile industry has been the worst affected sector, CarDekho still managed to grow. Following a temporary blip in visitors, the platform witnessed a surge in unique users after July 2020. It went from 36 million in March to 18 Million in April and back to 51 million in November. As per CMO Gaurav Mehta, personal mobility has seen a boost amidst Covid with customers looking to buy their own vehicle due to virus risk. Despite seeing no sales for almost two months, the founders did not sit twiddling their thumbs. Rather, they worked on introducing home inspection besides providing health insurance.
With a spike in demand for motorcycles in Tier 2 and 3, the company recently launched online insurance portal InsuranceDekho.com offering service in motor and health insurance. The company is also in the process of opening around 56 offline stores across the country, few already in operation, as demand for the used car segment rises. CarDekho is looking at the franchise model for the same.
Through constant hard work and dedication the company today stands at the pinnacle, a story that started humbly in Jaipur has now come a long way and has become a tale of success.
As a global brand, CarDekho, which already has presence in Indonesia and the Philippines under brand names OTO and CARMUDI respectively, aims to strengthen its presence further by entering new markets.
In an interview, Amit mentioned that the start-up is looking to raise about $200 million in a pre-IPO round towards setting up an asset-heavy pre-owned car business.
Stories like that of CarDekho are a reminder that maybe several ideas later you will finally stumble upon something that will turn your story upside down, so never stop thinking and experimenting because one day you might replicate the story of CarDekho in your own way.
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