 "Vinay Sanghi")
Online auto marketplace cartrade.com, which has recently raised Rs 185 crore funding from an affiliate of Warburg Pincus, plans to utilise the funds to launch multiple products on the mobile platform, upgrade the platform, double its sales force within the next one year as well as invest heavily in marketing initiatives. In short, the capital raised would be used to diversify as well as strengthen cartrade's offerings to dealers and individual customers.
Vinay Sanghi, the promoter of cartrade.com, explained that while the company already had an Android mobile application, it plans to further upgrade the platform as well as add multiple products. "We are planning to bring an application for iPhone as well very soon. With the advent of the smartphone, we expect nearly 75 per cent of the classifieds to come from the mobile application in the next few years ," he said. Around 1,20,000 vehicles are listed on the website at the moment.
However, one of the most important investment areas would be on marketing and communication. "We are looking at mass advertising, like television commercials etc. This apart, we are targeting to double the sales force from a current 600 people in around a year's time," Sanghi said.
Cartrade.com is basically an online automotive market for buyers and sellers of both new and used vehicles. Car auctions take place across all major cities in the country with over 1,200 dealers participating in these auctions. The portal operates as a platform for both business-to-business (B2B) and business-to-customer (B2C) transactions. Dealers can offload their inventory here, so can banks as well as fleet owners. Individual customers can buy or sell, and so can fleet owners.
The company's sales force visits dealers, train them about the online auctions, and also try to get them on board. Hence, by doubling the sales force, cartrade is basically trying to expand its reach among dealers and fleet owners. For the individual consumer, there is the route of mass advertising through television, internet, which is why, the company now plans to focus on mass advertising in order to increase the traffic at the website.
Currently, the portal and the mobile app gets around four million unique visitors per month.
For the B2B vertical, there is a transaction key model, while for the B2C model, there is a listing fee for listing the car on the website. "Around 33 per cent of the revenues come from the transaction key model, while another 33 per cent from listing fees and ad revenues account for the remaining," claimed Sanghi.
MotorExchange, founded by Vinay Sanghi as founder and CEO, and Rajan Mehra, founder director, owns cartrade.com, and had raised series-A round of funding in December 2009 from Canaan Partners and other investors including Austin Ligon, who is the founder CEO of CarMax USA. A year later,the series-B round in December 2010 had funds coming from Canaan Partners and Epiphany Ventures, and thereafter, MotorExchange raised $13 million in series-C funding led by Tiger Global Management with participation from existing investor Canaan Partners. This time around, it has raised Rs 185 crore led by an affiliate of Warburg Pincus, a leading global private equity firm, with participation from existing investors Canaan Partners and Tiger Global.
Sanghi, however, did not disclose the current shareholding as well as the company's revenues.
