CarTrade, an Indian online automobile classifieds startup has acquired its rival CarWale from German media conglomerate Axel Springer. The financial terms of the deal has not been disclosed but the sources suggest the deal value would be around $90 million.
Founded in 2010, CarTrade.com offers the buyers and sellers a well-organized platform for buying and selling new and used vehicles. Early this year, the company raised an undisclosed fund from Chip Perry along with Warburg Pincus, Tiger Global Management and JP Morgan. With this round of funds, the company was valued to be $100 million.
According to the acquisition deal, Axel Springer would sell its 91% of CarWale’s stake holding to CarTrade. The CarWale’s two-wheeler’s retail division Bikewale will also now belong to CarTrade as per the deal. Further to the acquisition, CarTrade and CarWale is function as separate entity. “Both platforms will operate independently. CarWale will focus on being the new car brand, while CarTrade will be the used-car brand,” said Vinay Sanghi, founder of CarTrade. The combined entity will now have around 2000 employees with some 9000 car dealers and 2.25 lakhs used cars listed in the portal.
After the closure of the deal, Carwale’s Mohit Dubey will join the combined entity as a cofounder and director with an equity stake in the CarTrade. The acquisition is expected to help the company earn revenue of up to $400 million in the next four years. “Car dealers now get around 60-70% of their sales from online customers and spend around 1% of their sales on marketing,” said Dubey.
“Through the merger with Car-Trade, we are facilitating reasonable market consolidation and, at the same time, are multiplying our invested capital in a highly competitive market,” said Ralph Buchi, president for international business at Axel Springer in a statement.