Used-car retailer, Cars24 has earmarked $100 million to invest in its international business, which currently includes Australia, West Asia and Thailand.

The unicorn start-up has recently raised Series G funding round of $400 million and is also expanding its network of mega refurbishment labs (MRLs) in South India by opening the 7th MRL in Bengaluru. BusinessLine spoke to Sudhir Shukla, Chief Marketing Officer of Cars24, about the company’s expansion plans and growth of India business.

Do you have plans to enter more international regions with the help of $100 million investment?

You will see us expand into a couple of other markets in the West Asian region and we are also expanding in the South-East Asian markets. We have already got Thailand and as we speak, there’s work underway for a couple of more countries to go live in that part of the world. We will have about three countries going live in the next three to six months. Indonesia and Malaysia are among the next few countries on our radar. Global expansion is absolutely critical for Cars24 and a lot of our fund mobilisation in the last 12 months has also been with that objective.

What is the revenue contribution of Cars24’s international business as compared to the India business?

Our global operations account for 20 per cent of our revenue and that’s a fairly good scaleup within about 12-18 months of launch across the board. We’ve been in India for about six years now. India occupies the biggest pie in terms of our revenue, given just the maturity that it enjoys. What we have seen in UAE has given us the confidence to invest in such a big yard facility there. The signs have been very encouraging in the international markets and that’s the proof of concept with which we are expanding into multiple other countries.

What are the current revenue numbers? Is the company close to profitability?

As of December, we are clocking an annual revenue run rate (ARR) of $1 billion and plan to double our revenue in 2022. Our intent has always been to create value first for customers and disrupt the used car market and that is what makes us a market leader in the online used car segment with 90 per cent market share, and overall market share is 5-6 per cent.

We are not profitable yet, as we are currently focussing a lot more on growth. The used car market in India, for example, is slated to grow at 11 per cent CAGR for the next three to five years. We are ambitious around our top line and the focus of the entire organisation is to make sure that we maximise growth in the next imminent future.

How much investment have you planned towards setting up Cars24’s Mega Refurbishment Labs?

Our seven company-owned refurbishment centres called Mega Refurbishment Labs (MRLs) have a capacity to refurbish 20,000 cars monthly, employs 1,540 auto experts and have an overall area of about 35 acres. The seven MRLs will be across key metro markets of Delhi NCR, Mumbai, Bengaluru, Ahmedabad, Chennai, Hyderabad and Pune. Our MRLs in the South (Bengaluru, Chennai and Hyderabad) occupy a total area of approx. 6.3 acres (2,77,000 sq ft) are the largest refurbishment facilities in the country and these establishments will generate over 655 auto experts’ jobs in the southern region.

While used-car retail has picked up, India is one of the largest two-wheeler markets. Do you have plans to enter pre-owned bike retail as well?

Bikes are certainly something that we’ve thought about. We are also running a pilot in Delhi NCR called Bikes24 and have also invested in a yard facility there. Bikes are an opportunity that we are excited about, but we also want to maximise the cars business before we get into other workstreams. The pilot was started early H2 2021 and is expected to continue for a while. With the reports of a third wave coming in, it’s kind of difficult to read into those results at this point. We’ll possibly be at it for a little bit longer before we make a decision.

Other players in the used-car retail such as Droom and CarTrade have gone for an IPO. Does Cars24 also plan to file for an IPO anytime soon?

IPO is just a milestone in the journey. It’s not something that we are thinking a lot about at this point. Overall, we’re focused on solving the real consumer pain point around the highest quality cars at the best price. With the fundraisers that we’ve done in the last 12 months, we feel that we are adequately resourced at this point. Of course, IPO is going to be on the horizon and maybe 24 to 36 months down the line, there could be a development.

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