We’re well-capitalised, not seeking funds: CarDekho

NEW DELHI: The CarDekho Group, whose businesses span auto, insurance and financial services spaces, is well-capitalised and is not seeking funds from investors at the moment.

“We have Rs 1,400 crore (at the group level) in the bank. Companies which are sitting on sufficient cash reserves will avoid raising capital because they may face the heat of a down round (when private companies raise funds at a lower valuation than previous funding round) if they go out in the market right now,” co-founder & CEO Amit Jain said in an interview. Valued at $1. 2 billion, CarDekho has raised about $450 million from investors so far to fund the group’s varied business verticals.

Jain aims to steer the group towards profitability in the current financial year. With the global macroeconomic scenario still on a sticky wicket, investors continue to be prudent with funds and are increasingly pushing their portfolio companies to turn profitable.

CarDekho, backed by Sequoia Capital and Goldman Sachs Asset Management, scaled down its highcash burn used car business, shutting all its brick and mortar Gaadi stores, barring the one in Jaipur, which facilitated physical inspection of used cars before facilitating buying and selling transactions.

“We prudently cut down burns in areas that were not looking healthy from a uniteconomics perspective, given the macro environment. Used car space is still an unorganised market and we could not come up with a winning formula to make the segment organised through the use of technology,” Jain said.

The group’s new auto and financial businesses are already profitable, while its insurance subsidiary, which earlier this year managed to garner $150 million in early stage capital from investors, has managed to break even, claimed Jain. “We are eyeing a full-year profitability at the group level this financial year,” said Jain. In layman terms, unit economics measures a company’s ability to make money from the sale of a single unit. In the fiscal 2021-22, the company had posted consolidated losses of Rs 246. 5 crore.