Valiant backs Mahindra-owned used car trading platform

MFCWL, which is controlled by the Mahindra Group, claims to be the country's leading multi-brand certified used car player, with a network that is expected to number 500 franchised outlets across 240 urban centers by the end of the 2015 financial year. It wants to surpass 1,800 outlets by 2020.

The company has seen compound annual growth of more than 40% in used car sales over the past five years. In the 2014 financial year, sales involving 57,000 cars were transacted through its platforms, up 30% on the previous 12 months.

In addition to its offline presence, MFCWL has sold more than 225,000 vehicles through eDiig, an online wholesale auction platform. It also operates Autoinspekt, a third-party vehicle inspection service that has conducted over 150,000 inspections since launching in June 2013, and vehicle pricing guide Indian Blue Book.

This is MFCWL's second round of external private equity funding, following a commitment from New Delhi-based Phi Capital in 2008. It will use the new capital not only to expand its physical network and vehicle categories, but also accelerate the adoption of technology-enabled services by industry stakeholders, including banks, non-banking financial companies (NBFCs), manufacturers, dealers and consumers.

With an estimated 3.2 million vehicles traded each year, India's used car market is already larger than the market for new vehicles and growing faster. It is projected to be nearly twice the size of the new car market within five years.

"Consumers are looking for more tools and insight related to used vehicles. We are leveraging our deep wholesale and retail experience on the ground to launch a slew of technology enabled products that will materially increase the confidence with which they can transact on used vehicles - whether buying or selling," said Nagendra Palle, CEO and managing director of MFCWL, in a statement.

Valiant, which has more than $2.5 billion in assets under management, has invested in the likes of Facebook, Dropbox, Pinterest and Uber. India-based portfolio companies include Yatra Online, Shriram Housing Finance, FreeCharge and FirstCry.

Its commitment to MFCWL follows a $50 million Series B round for GirnarSoft, owner and operator of India-based automobile trading platform and information portal CarDekho, led by Hillhouse Capital in January. Hong Kong hedge fund Tybourne Capital and existing investor Sequoia Capital also participated in the financing, which valued CarDekho at $300 million.

CarDekho and Gaadi.com - which GirnarSoft acquired from Naspers last year - are said to be the largest players in India's online auto classifieds space by revenue and traffic. They also allow individuals and dealers to sell new and used vehicles, among other functions.

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• Topics
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• South Asia
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• TMT
• Consumer
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• automobiles