NEWS

Ratan Tata invests in an auto portal

Monday, Feb 09, 2015

Ratan Tata has made a personal investment in auto classifieds portal CarDekho, once again reaffirming his bullishness around India's rapidly growing digital consumption story. Last year, Tata took a wager on Delhi-based e-commerce biggie Snapdeal followed by jewellery e-tailer Bluestone and online furniture retailer Urban Ladder amid a rush of funds into the thriving consumer internet sector.

The 76-year-old chairman emeritus of Tata Sons, the holding company of the $100-billion steel-to-software conglomerate Tata Group, has subscribed to fresh shares of the Jaipur-based GirnarSoft which owns and operates CarDekho.com, BikeDekho.com and PriceDekho.com. TOI could not ascertain the exact size of Tata's investment. However, like Tata's previous deals, all of which have been in his personal capacity, this too will be a small minority stake for him in the venture. The real significance of all his investments in new-age internet companies has been in the endorsement that Tata brings along for these fledgling enterprises.

CarDekho, now valued at $300 million, recently received $50 million in a fresh financing round led by China's Hillhouse Capital, which manages $14 billion in assets, Tybourne Capital and its existing investor venture fund Sequoia Capital. The combined entity of CarDekho and Gaadi.com, which the Jaipur firm acquired last year from the Ibibo Group, competes with the likes of Cartrade.com and Carwale.com, besides the general online classifieds services like Quikr and Olx.

Tata's expertise in the automobile sector, especially in respect to the forays he made for his group into global markets, will likely help CarDekho scale up geographically.

Confirming the investment from Tata, Amit Jain, CEO and co-founder of CarDekho, said, "We are extremely excited to partner with him (Tata) considering his contribution to the growth and development of the Indian automobile industry. Following our humble beginning as a small venture in Jaipur, CarDekho has had a very exciting journey to reach this point of recognition and we now have a very aggressive plan for developing our business and boosting revenues in the future."

The idea of the flagship CarDekho was kicked off by brothers Amit (38) and Anurag Jain (36), both IIT-Delhi alumni, after their visit to the Delhi Auto Expo in 2008. A year earlier, they had founded an IT outsourcing firm GirnarSoftware, providing a launch pad for innovations in the consumer internet space based out of Jaipur.

Anurag Jain, COO and co-founder of GirnarSoft, said, "We are focusing on strengthening the brand presence through various activities this year. We would also be looking at doubling our workforce by hiring 1,000 more people this year. Given that India is soon to become the third largest car market in the world, we are poised to create significant value for its shareholders." Auto portals are attractive for investors due to the massive potential of car purchases among India's fast-growing middle class and successful IPOs of Chinese players like Autohome and BitAuto.

CarDekho claims to have 10 million unique visitors on its site and expects to garner growth through online advertising by carmakers, subscription charged to used car dealers and new car sales through the portal. Its acquisition of Naspers-owned Gaadi.com was aimed at helping it scale up its used car presence, a growing category in India. The combined entity claims to be the largest in terms of traffic and revenue in the auto classifieds space. The company said its lead generation has been doubling year-on-year as traffic grew 45% over the previous year.Ratan Tata has made a personal investment in auto classifieds portal CarDekho, once again reaffirming his bullishness around India's rapidly growing digital consumption story. Last year, Tata took a wager on Delhi-based e-commerce biggie Snapdeal followed by jewellery e-tailer Bluestone and online furniture retailer Urban Ladder amid a rush of funds into the thriving consumer internet sector.

The 76-year-old chairman emeritus of Tata Sons, the holding company of the $100-billion steel-to-software conglomerate Tata Group, has subscribed to fresh shares of the Jaipur-based GirnarSoft which owns and operates CarDekho.com, BikeDekho.com and PriceDekho.com. TOI could not ascertain the exact size of Tata's investment. However, like Tata's previous deals, all of which have been in his personal capacity, this too will be a small minority stake for him in the venture. The real significance of all his investments in new-age internet companies has been in the endorsement that Tata brings along for these fledgling enterprises.

CarDekho, now valued at $300 million, recently received $50 million in a fresh financing round led by China's Hillhouse Capital, which manages $14 billion in assets, Tybourne Capital and its existing investor venture fund Sequoia Capital. The combined entity of CarDekho and Gaadi.com, which the Jaipur firm acquired last year from the Ibibo Group, competes with the likes of Cartrade.com and Carwale.com, besides the general online classifieds services like Quikr and Olx.

Tata's expertise in the automobile sector, especially in respect to the forays he made for his group into global markets, will likely help CarDekho scale up geographically.

Confirming the investment from Tata, Amit Jain, CEO and co-founder of CarDekho, said, "We are extremely excited to partner with him (Tata) considering his contribution to the growth and development of the Indian automobile industry. Following our humble beginning as a small venture in Jaipur, CarDekho has had a very exciting journey to reach this point of recognition and we now have a very aggressive plan for developing our business and boosting revenues in the future."

The idea of the flagship CarDekho was kicked off by brothers Amit (38) and Anurag Jain (36), both IIT-Delhi alumni, after their visit to the Delhi Auto Expo in 2008. A year earlier, they had founded an IT outsourcing firm GirnarSoftware, providing a launch pad for innovations in the consumer internet space based out of Jaipur.

Anurag Jain, COO and co-founder of GirnarSoft, said, "We are focusing on strengthening the brand presence through various activities this year. We would also be looking at doubling our workforce by hiring 1,000 more people this year. Given that India is soon to become the third largest car market in the world, we are poised to create significant value for its shareholders." Auto portals are attractive for investors due to the massive potential of car purchases among India's fast-growing middle class and successful IPOs of Chinese players like Autohome and BitAuto.

CarDekho claims to have 10 million unique visitors on its site and expects to garner growth through online advertising by carmakers, subscription charged to used car dealers and new car sales through the portal. Its acquisition of Naspers-owned Gaadi.com was aimed at helping it scale up its used car presence, a growing category in India. The combined entity claims to be the largest in terms of traffic and revenue in the auto classifieds space. The company said its lead generation has been doubling year-on-year as traffic grew 45% over the previous year.

 

 

Source: http://economictimes.indiatimes.com

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