Source Interlink Media acquires majority stake in Carazoo
US-based Source Interlink Media, LLC, a division of Source Interlink Companies, Inc. (a media, publishing, merchandising and logistics company), has acquired a majority stake in Carazoo, an online platform that helps users buy and sell used and new cars, for an undisclosed amount.
Carazoo is a subsidiary of Logix Americas Inc, which is a wholly owned subsidiary of BSE-listed Logix Microsystems Ltd, a company backed by Passport Capital and also by Ashish Dhawan of ChrysCapital in his personal capacity.
Carazoo provides dealer management software, website development and marketing services to a variety of automotive and motorcycle dealerships in India. The company also operates Carazoo.com, an automotive portal for buying and selling used and new cars. The company claims that the portal has over 5 lakh unique visitors per month. Its Indian competitors include Carwale.com, Indiaautomobile.com, CarSalesIndia.com, AutoIndia.com and Motorexchange.in, among others.
"The acquisition of Carazoo is a major step forward in executing our strategy to provide international scale and reach as a marketing partner to advertisers with a global presence. This acquisition will provide an established platform for rapid expansion in one of the fastest growing automotive markets in the world," said Chris Argentieri, president of Source Interlink Media.
The acquisition will allow Source Interlink Media to expand into India, a market where the company believes that the demographics support a long-term growth opportunity for the automotive sector. Source Interlink Media is one of the largest providers of content to communities interested in automotive, action sports, marine and other niche activities in the US that include more than 75 publications, 100 websites, 800 branded products, 50-plus events and TV & radio programmes.
Sanjay Soni, director of Logix Americas, said, "Carazoo is uniquely positioned in the Indian automotive market, both as a consumer website and a platform for dealer marketing. The resources and relationships that Source Interlink Media will bring to this partnership will enable Carazoo to increase the pace of its already growing business."
Logix Americas is a provider of automotive solutions for customers in the US, Europe and India. The company's products are sold under the brand Izmocars.
Techcircle had hinted at a possible sale of Carazoo last December. Logix had hived off Carazoo and turned it into a separate subsidiary.
Other deals in car portals
Auto portals have been one of the key e-com verticals attracting both M&A's and capital from institutional investors. In September last year, CarSingh raised an undisclosed amount in its first round of funding from Seeders Venture Capital Pvt Ltd. Prior to that, pre-owned vehicle sales portal MotorExchange raised $13 million in a third round of funding, led by Tiger Global Management.
Also in 2010, European multimedia company Axel Springer AG and the India Today group acquired 70.4 per cent stake in Automotive Exchange Pvt Ltd (owner of the automotive classified ads portal Carwale.com). Again in 2011, the MIH Group, a subsidiary of the South African media group Naspers, acquired a majority stake in Gaadi Web Pvt Ltd that runs the auto classifieds site Gaadi.com. Other automotive portals in India include eBay Motors, Autojunction.com, Autoindia.com and Zigwheels.com.