Automotive Exchange Pvt Ltd, the owner of automotive classifieds site Carwale.com, has come a long way since October 2005 when Mohit Dubey, Arun Kumar Sahlam, Gaurav Verma and Tufail Khan launched a portal to help consumers find the right cars in the cluttered auto market. With European multimedia behemoth Axel Springer AG and India Today Group recently picking up a 70.4% stake in Carwale.com (while the remaining stake is with founders and employees), it has turned out to be one of the few successful exits in the Indian internet industry. Dubey and his team are staying put with the company as they are aiming for an IPO exit in 2015. Excerpts from an exclusive conversation with VCCircle.
What were the key milestones for Carwale.com?
We launched Carwale.com in October 2005 and our first users were friends. Back then, there was no easy way of researching the right car or purchasing an used car. We were clear about our idea – to ease the car buying experience for consumers and our mission still remains the same.
Our first client sign was Tata Motors which happened in mid-2006. Later that year, we received our first funding from Seedfund and Sierra Ventures and launched our price guide which is now being used by 25,000 people per day. In 2007, we added new features such as on-road pricing which was received warmly by users and in 2009, we offered online booking for Tata Nano cars, and were only the 3rd online portal to offer it besides ICICI and Tata’s own site. Over the years, we have received many awards which are a testimony to our work.
What were the main challenges you faced while starting up?
Unlike other start-ups which face the common problems of finding the right team, and a purpose, I was lucky to have a great team and did not have a problem as we had a clear cut goal in mind. When I started as an entrepreneur in 2002 in telemedicine, I burnt my fingers in many sectors and with this idea, I was ready as we were secure in our vision for Carwale. Convincing people to invest in our idea was a huge challenge, and it especially takes longer in India. I took money from friends, family, HNIs. It is essential to have the guts to walk up to a rich man and sell him your idea.
How did you go about bagging Axel Springer as an investor?
We did not look for it, it just happened. Axel Springer was interested in the Indian automotive sector. We evaluated the proposal taking into consideration our existing investors and wanted to ensure it was going to give them returns. With Axel Springer and India Today there are immediate synergies related to content, awards and events which we will be exploring. Axel Springer owns the strongest media brand in the auto space Auto Bild and already own 80 online properties, so they are also significantly invested in digital and new media in advanced markets. India is following suit like the US and other advanced markets in its online growth, and there is a lot to learn from Axel’s successes in these areas.
Did other investors approach you?
Yes, we did have other options on the table, from the dot com sector as well as traditional publishing and media.
How has your site grown over the past 5 years?
In 2005, we had 500 used car listings and this is now around 8,000 but this keeps changing as and when cars are sold – overall around 10,000 cars get listed on our site per month. We get 17 million page views per month and 70,000 visitors per day who browse around 10-12 pages at a go.
New car research has grown 13%, and we now have 260 million page views compared to the 19 million we had in 2006. Used car listings have grown 12% from when we started and used car valuations are up 37 times.
Every month, Carwale.com sees 1.4 million unique visitors. 70,000 people say they want to buy a car and 35% of them end up buying a car. Of these, the majority are buying used cars. We now have 15% of all of India’s car buyers researching on our website, and we attract 35% of all of India’s used cars that are listed online, so we are looking at becoming one of the most influential media properties in the automotive segment.
Did your move of making Carwale.com a paid site dent growth?
Last year, we recorded 12,000 used car listings when the site was partially paid and partially free. In January, we went 100% paid and now it is around 10,000. But it is still growing and we have been witnessing a healthy 10-15% growth per month over the past few months.
Can you give a breakup of percentage revenue contribution from new cars and used cars? Do you plan to continue with this existing model?
It is a 60-40 ratio from products for new cars and used cars. Yes, we will definitely continue with the model as it has been working well, especially over the past year. Also, we have no offline plans for now, but are keeping our options open.
What do you think of the competition?
Competition does not worry us; we are growing the category together and are all benefiting. Moreover, our positioning is very different, from say Zigwheels.com, the Times supported auto site. Sustaining leadership in this segment is very difficult. Some players like Consim
Info's Indiaautomobile.com realised it is not easy to catch up.
Can you sustain the growth or do you see it plateauing?
The market is booming, the number of internet users is growing, we will sustain a multiple factor growth. Every leading portal in dating, job, travel, real estate and auto websites are doing phenomenally well and many are going in for IPOs. It’s growth, all the way, for all of us.
What are your plans for Carwale.com?
In 4-5 years, we hope to go public. We are definitely an IPO case. In the shorter term, we are focussing on product innovation and will add more features on pricing, research and content to the website on an on-going basis. We are also ramping up our employee base.
What advice would you give digital entrepreneurs?
I think it is time they realise that a lean start-up is more about speed than cost – after all, if you run fast, you get thinner, don’t you?