Logix Microsystems is hiving off its online platform Carazoo that helps users buy and sell used and new cars. It will be turned into a separate subsidiary Carazoo Online Solutions Pvt Ltd, in a move that may allow the company to raise funds independently for expanding the business of the portal.
Currently, Carazoo is a business division of public-listed Logix Microsystems, a company backed by Passport Capital and also by Ashish Dhawan of ChrysCapital in his personal capacity.
The company’s board has approved the move in a meeting today. It now awaits a green signal from its shareholders.
Although details of the business operations of Carazoo could not be immediately verified, the parent firm had disclosed in the last annual report that income from the Indian portal Carazoo showed an impressive jump of 51 per cent in 2010-11, compared to the previous year. Incidentally, auto portals have been one of the e-com verticals attracting both M&As and money from institutional investors.
In September this year, CarSingh raised an undisclosed amount in its first round of funding from Seeders Venture Capital Pvt Ltd. Founded in January 2010, CarSingh claims to offer the largest selection of used cars inventory from dealers and private sellers, and says that it attracts more than two lakh users per month. It is now planning to expand its operations in used cars market across India, besides focusing on the after-sales market.
Before that, pre-owned vehicle sales portal MotorExchange raised $13 million in a third round of funding, led by Tiger Global Management. Also in 2010, European multimedia company Axel Springer AG and the India Today group acquired 70.4 per cent stake in Automotive Exchange Pvt Ltd (owner of the automotive classified ads portal Carwale.com). Earlier in 2011, the MIH Group, a subsidiary of the South African media group Naspers, acquired majority stake in Gaadi Web Pvt Ltd that runs the auto classifieds site Gaadi.com. Other automotive portals in India include eBay Motors, Autojunction.com, Autoindia.com and Zigwheels.com.