Axel Springer AG, one of the largest multimedia companies in Europe, is picking up a 52.1% stake in Automotive Exchange Pvt Ltd, the owner of automotive classified ads portal Carwale.com.
Indian media company India Today Group has also acquired 18.3% in Carwale, owned by Automotive Exchange Pvt Ltd, taking the total stake sold to 70.4%. The remaining stake is with the founders led by Mohit Dubey and also employees. The founders have sold part equity. Axel Springer and India Today group jointly publish Auto Bild auto magazine in India.
Carwale's investors - early stage fund Seedfund and Sierra Ventures - have sold their entire stake, according to Mohit Dubey, CEO, Carwale. He did not disclose the deal size, however, maintained that the investors - including the angels - have made several multiple returns on the deal.
In 2006, Carwale raised funding from Seedfund, diluting about a 30% stake. It raised another $7 million in commitment from Sierra Ventures in 2008.
Axel has also acquired 19.1% stake in lifestyle marketplace BagItToday (www.BagItToday.com), a portal owned by the India Today Group. Axel Springer has also acquired the option of increasing its 19.1 percent to a majority stake in Bag It Today.
Ralph Buechi, President, Axel Springer International at Axel Springer AG, said in a statement: “In pursuit of our digitization and internationalisation strategy, we are now taking the next growth steps in a dynamic, fast-growing market. Together with the India Today Group, we are investing in highly promising online growth sectors."
Axel Springler owns AUTO BILD, the world’s biggest selling automotive magazine. India Today Group and Axel Springler have been jointly publishing the Indian edition of AUTO BILD since 2008.
Carwale claims to have 1.3 million unique users and more than 17 million page impressions per month. The classified ads portal makes money by selling customer leads to new car dealers and to used car brokers.
There are several other players in this segment. They include Autoindia.com, Carazoo.com, launched by Bangalore-based software maker Logix Microsystems, Gaadi.com, among others.
India is considered the fastest growing auto market in the world as well as one of the fastest growing online markets. Enjoying growth rates of over 20% year-on-year, it is projected to become one of the top 3 online markets in the world by 2013, along with China and the USA.
“We are delighted to become a part of the Axel Springer Group and also associate with the India Today Group. With Axel Springer’s international automotive and multimedia publishing experience, and the India Today Group’s un-matched credibility, this is a big step towards creating a very successful company in India’s online auto space. We are super excited about our business and this deal,” said Mohit Dubey, CEO and co-founder of CarWale.
Axel Springer is the largest publishing house in Europe and controls the largest share of the German market for daily newspapers. The €2.6 billion ($3.61 billion) major is active in 36 countries with more than 230 newspapers and magazines, more than 80 online offerings as well as holdings in television and radio stations.