It joins a growing list of unicorns such as Vedantu, Unacademie, Misho and others who have recently laid off staff in the wake of the startup ecosystem funding crisis.
A development-conscious person told FE that the decision to lay off startup staff was part of its “normal” performance-linked review process, and denied that it was due to cost reductions. Currently, Cars24 has more than 9,000 employees in the country and the layoffs have affected about 7% of the total team size.
“It’s like a business performance-linked exit that happens every year,” a company spokesman told FE.
Recently, a number of high-growth startups, including Vedantu, Misho, Trail, OKCredit, Farlenko, Lido, Misho, Unacademie, Better.com and others, have collectively laid off more than 2,000 employees. Experts say the slowdown in growth and late-stage funding, coupled with warnings from investors and board members following a technical stock crash, have forced startups to reduce their employee-related costs.
Just a few months after the startup launched its biggest round, led by Alpha Wave Global, a 24 400-million financing round at Cars24, raising its valuation to about $ 3.4 billion.
Cars24 became a unicorn in November 2020 in a $ 200-million round led by DST Global. Founded in 2015, the startup takes care of customer travel ranging from car discovery to pricing, financing and renewal. The Cars24 platform, according to its previous statement, saw accelerated demand in global markets, including Australia, the United Arab Emirates and Thailand.
Globally, the retail share of used cars is currently valued at $ 100-billion. The segment has emerged as one of the fastest growing consumer internet verticals, especially after the epidemic in the automobile segment in CY2020.
According to a report by OLX Auto and Crisil, India’s used car market share is expected to list more than 7 million vehicles by 2025-26, compared to 3.8 million vehicles listed in 2020-21. This is a CAGR of 12-14% over the next five years. In FY22 alone, the pre-owned car industry is expected to grow at a rate of 15% because Covid-19 will disrupt consumer spending patterns and digitization will enter even smaller cities.
Vikram Chopra, co-founder and CEO, Cars24, had earlier detailed his aggressive international expansion plans in a statement in December 2021 when the company secured a $ 400-million round of funding. Cars24 has been vocal about its IPO plans while several reports have indicated that the firm is preparing to make a public offer in the next two years.
“Cars24 has aggressive plans for 2022 and beyond and we can’t wait for this investment to work. Today, we are seeing greater acceptance among customers around the world for our platform when buying their next car … As we continue to build the best infrastructure for the future with a last-ditch digital customer experience, we are confident that our customers will enjoy our high- With experience in the touch industry, ”Chopra said in a statement.
The pre-owned car retailer segment has been the focus of investor activity in recent financing rounds with startups like Spini, Cardekho and Drum.
In addition to raising funds, Mumbai-based Cartrade recently unveiled a `2,999-crore IPO in August with 20 times more subscriptions. However, Cartrade’s stock price fell significantly to `559 per share on Thursday’s closing day, compared to its high of` 1,600 in August 2021.