MotorExchange Raises $13M From Tiger Global & Canaan Partners
Pre-owned vehicle sales portal MotorExchange has raised $13 million or Rs 59.7 crore through its third round of funding led by venture capital firm Tiger Global Management, in which existing investor Canaan Partners also participated.
The proceeds of the funding will be utilised to expand the consumer businesses, Vinay Sanghi, CEO and Director, MotorExchange said. "We will add more cities to the network and also use the funds for brand building and adding more people at various levels in the company. We plan to increase the headcount to 200 from the existing 105 in next 8-10 months," he told VCCircle.
Sanghi said the funds raised now should be absorbed in another 24 months.
He said the pre-owned vehicle market in India is estimated at around 20 lakh units a year and is expected to grow playboned at 15 per cent annually for the next five years. MotorExchange has tied up with 1,200 dealers in the country and plans to add another 2,800 dealers in next two years time. India has close to 22,000 second hand vehicle dealers in the country.
"MotorExchange presents a unique opportunity to improve transparency, convenience, and choice to new and used car customers throughout India," Lee Fixel, Managing Director, Tiger Global Management said on the deal.
In its Series A round of funding in December 2009, MotorExchange raised funds from Canaan Partners besides other investors including Austin Ligon( Founder CEO of CarMax USA) and followed it up with a Series B round in December 2010 from Canaan Partners and Epiphany Ventures.
MotorExchange, that is promoted by Vinay Sanghi (the former CEO of Mahindra First Choice) and Rajan Mehra(Managing Director at Nirvana Venture Advisors and former country head of eBay India), is estimated to have scooped somewhere around $23 million in total in the three rounds of venture capital funding.
Launched in December 2009 MotorExchange, is an ecommerce platform, which provides sellers and buyers a platform for transacting used vehicles, targets dealers, institutional and individual sellers. The company charges a fee from buyers and sellers on these transactions. The company also owns CarTradeIndia.com, a leading auto classifieds site.
With the unorganised industry still is the biggest competition, MotorExchange's peer group includes other automotive portals in India such as eBay Motors, Autojunction.com, Carwale (in which Axel Springer and the India Today group picked up a 70.4 per cent stake in December), Autoindia.com, Carazoo.com, Gaadi.com and Zigwheels.com.