Online marketplace for used cars, CarDekho has either shut or in the process of closing down over one-third of its offline so-called Gaadi stores across the country, a person familiar with the development told VCCircle. The company is backed by Sequoia Capital and Google’s venture capital arm CapitalG.
CarDekho, which was founded in 2007 by siblings Amit Jain and Anurag Jain, is shutting down a little over 20 Gaadi stores out of its 60 stores spread mostly across NCR, Mumbai and Bangalore, the person cited above, said on condition of anonymity. The stores are being closed to cut costs as the company is struggling to raise fresh capital, the person added.
However, a spokesperson of CarDekho told VCCircle that the information that some stores are being closed is "factually incorrect", adding that most of its customers opt for home inspection over visiting a physical store. "As a regular business practice, we keep realigning our stores to ensure maximum customer convenience," the spokesperson added.
The spokesperson added that the company is doubling down on the NCR market with enhanced focus via its retail hubs focusing on both car procurement from and retailing to customers. The spokesperson also did not comment on the next round of funding plans for the company.
Entrackr first reported the development of the shutting down of stores. The move to shut down these stores, or "realign" them as the company puts it, comes at a time when the broader used car segment has been witnessing a lot of developments.
For instance, rival CarTrade floated its initial public offering (IPO) and listed on the stock exchanges last month. In its red herring documents (RHP), CarTrade said that it is the only profitable digital auto platform for fiscal 2019-2020 in its segment.
In July, online automobile marketplace Droom Technology said it is raising $200 million in a pre-IPO funding round at a valuation of $1.2 billion, making it the latest startup to achieve the unicorn status. Droom added that it plans to float an IPO next year.
In the same month, pre-owned cars platform Spinny raised Rs 771.5 crore in a new funding round led by Tiger Global Management.
Last week, Cars24 attracted SoftBank as an investor in a new funding round that is expected to be in the range of $340-350 million, a person in the know told VCCirlce.