Peak XV, Google, Hillhouse eye part exits as CarDekho plans IPO

CarDekho, which is expected to file its IPO papers in March, may see other early investors also book a profit from its public share offering, two people with direct knowledge of the matter told Mint.

“The company is planning to raise about $500 million including a primary component at a valuation of $2-2.5 billion,” one of them said. “The net proceeds from the public offering will be used to fund CarDekho’s geographical and category expansion and also for future acquisitions to expand its portfolio of its services.”

Google, Peak XV and Hillhouse have been on CarDekho’s capitalisation table for about a decade. “These investment firms will offload a part of their stake under the offer-for-sale option,” the second person mentioned above said, adding that CarDekho is in advanced discussions to appoint bankers for its IPO, which could be as early as next week.

CarDekho declined to comment. Google Capital said it would not comment on what it termed as ‘speculation’. Peak XV (formerly Sequoia India) said it had no comments on the matter, while Hillhouse did not immediately respond toMint’s emailed queries.

Startup IPOs are on a comeback this year after a tepid 2022 and 2023. So far in 2024, 10 startups have listed their shares, including FirstCry, Ola Electric, Go Digit, Awfis, and ixigo, riding the stock market’s bull run. Food and grocery delivery platform Swiggy’s upcoming IPO and electric-scooter maker Ather Energy’s listing are among the next most-anticipated public share offerings.

Also read | Startup IPOs have made a scorching comeback. Beware the optical illusion

Racing ahead

Earlier this year, CarDekho was in talks to raise $100-150 million in a largely secondary round—in which early investors sell all or part of their stakes in a company to other investors—at a slightly higher valuation of $1.3 billion,Mint exclusively reported in March.

That was a shade higher than the $1.2 billion CarDekho was last valued at, in October 2021, when it raised $250 million in a mix of primary and secondary funding. In that round, investors led by Leapfrog Investments, alongside Canyon Partners, Mirae Asset, Harbor Spring Capital, and existing investors Sequoia Capital India and Sunley House invested in the company.

CarDekho, which is owned by Girnar Software, has been actively working towards an IPO in recent months by focusing on improving its margins and revenue. In May, the company appointed Neelesh Talathi, a former finance head at Pepperfry, Mensa Brands, and Vedanta Group, as its group chief financial officer.

Co-founder and chief executive officer Amit Jain had said that the company would target at least 4-6 quarters of profitability before tapping the public markets, as per media reports in January.

CarDekho is already profitable at the group level, one of the people cited above said.

CarDekho’s consolidated revenue increased to ₹2,331 crore in 2022-23 from ₹1,600 crore in the year before, but its net loss widened to ₹562 crore from ₹535 crore. The company is expected to file its audited results later today.

Founded in 2008 by siblings Amit Jain and Anurag Jain, CarDekho started by selling used vehicles on its platform but pivoted to financing vehicles. It brought down its vehicle resale business, in which it competes with CarTrade, Spinny and Cars24, to near-zero in 2023-24.

CarDekho has invested $100 million in its fintech subsidiary Rupyy to scale up its non-bank lending business. The group has also started an insurance business, InsuranceDekho, and is aggressively scouting for acquisitions to bolster its bouquet of offerings.

In December, CarDekho acquired shared mobility startup Revv for an undisclosed sum.