CarDekho pushes ahead on the back of growth in used-car insurance and financing

CarDekho, the used-car marketplace owned and operated by Girnar Software, recorded 38% y-o-y growth in revenues to INR113 crore in FY17 primarily driven by rapid growth in auto financing and insurance for used cars, even underpinning the negative impact of demonetization. Amit Jain, CEO of CarDekho, said that “The annual revenue run rate is around INR130-140 crore while Ebitda burn has reduced 22% to a current monthly run-rate of less than INR3.8 crore in FY17. The last fiscal year saw our used-car strategy of generating revenues through service offerings across finance, insurance and warranty coming together, while remaining competitive on classifieds”.

After receiving the insurance broking license, CarDekho has now moved to a transaction-based system from the earlier leads-based insurance system. It processes ~1,500 policies at a monthly growth of 35% clocked in the fourth quarter of FY17. The startup is razor focused on the insurance business. The company head further said that “We have so far sold these only to 8% of our dealers. We are planning to grow to over $5 million (INR32 crore) of monthly loan disbursements and 10,000 policies by the end of current year”. The financing and insurance business accounts for 40% of the startup’s business, and it expects this segment to grow significantly faster than its bread and butter classifieds business.