CarDekho FY16 net sales zoom, but losses triple
Jaipur-based Girnar Software Pvt Ltd, which owns auto classifieds portals like CarDekho, ZigWheels and Gaadi.com, saw its FY16 sales rise a strong 75 percent, but losses almost tripled as the company spent significantly more on brand marketing.
Net sales for FY16 stood at Rs 82.48 crore, up from previous year's Rs 47.03 crore, filings with the Registrar of Companies (ROC) show.
Amit Jain, chief executive and co-founder of CarDekho, told Techcircle, "The used cars segment saw significant revenues...There was a growth spurt in the segment."
Losses, however, more than tripled to Rs 143.77 crore from Rs 47.11 crore in FY15, with the company seeing a huge increase in expenditure. Total expenses for FY16 stood at Rs 240 crore compared with Rs 96 crore in the previous financial year.
Jain attributed the surge in expenditure to the Indian Premier League (IPL) sponsorship, and said that brand marketing "took quite some money." He added that the two co-founders have stopped taking salaries since December, and will continue to do so till the company turns profitable.
Girnar Software, founded in 2007 by brothers Amit Jain and Anurag Jain, also owns BikeDekho.com, TyreDekho.com and BuyingIQ. It had bought Zigwheels.com from Times Internet in September 2015.
CarDekho's direct competitors are CarTrade and CarWale, which have merged, apart from Droom and horizontal classifieds players like OLX and Quikr.
In late 2015, MXC Solutions India Pvt Ltd, which owns auto portal CarTrade.com, had acquired rival CarWale (Automotive Exchange Pvt Ltd) for an undisclosed amount.
CarTrade's net sales stood at Rs 32.27 crore in FY16 and CarWale's were Rs 35.6 crore, according to RoC data collected by VCC Edge, the data and research platform of News Corp VCCircle. That adds up to Rs 67.87 crore, which trails Girnar Software Pvt Ltd's sales.
On Wednesday, CarTrade.com raised Rs 370 crore ($55 million) in a funding round led by existing investor Temasek Holdings (Singapore government's investment firm) and a US family office.