All those following the Indian startup industry closely in the recent past, might be aware of the venture capital funding slowdown that has taken over the industry. The slowdown has forced many startups to take a backseat or hang their boots altogether. Hyperlocal delivery start-up PepperTap was the recent one to wrap up its operations and bow down out of the game due to financial pressure.
But as they say, there is always an exception. Same is the case here as well. Well, while Indian startups across all sectors are currently facing tough times, surprisingly the automobile sector is zooming towards good times.
Nowadays, more and more people prefer buying their cars online because of the lucrative deals and the amount of time they end up saving if they would have physically gone to a showroom. This major shift in automobile buying patterns, has resulted in flow of cash and customers for auto portals like CarDekho and CarTrade. Reportedly, both these major players of the sector are doing incredibly well on the revenue fund and can hire up to 2,000 employees in this financial year. While a majority of the hiring will take place in the customer engagement department, sales department and client acquisition department, about 10 percent of the positions will be reserved for hiring people in the tech department.
Statistics reveal that till two years ago only 10 percent users searched online before fixing up a meeting with a car dealer. But now, over 40 percent users search online before making that appointment with an offline dealer.
This has helped these auto portals cash in moolah in three ways. Since a majority of consumers make use of these portals, the dealers are almost forced to have their presence on these portal and pay a fee to be listed. For the car manufacturers, these portals act as a great advertising medium. Some of these portals also allow transactions to take place through them and when that happens, they change a nominal 1.5 to 2.5 percent commission from the car dealers.
CarDekho's parent company, GirnarSoft, has swollen from a 1,200 team in March last year to a strong 3,000 team in March this year. According to sources, the startup aspires to take this number to 3,500 by the end of first quarter of this financial year. Automobile portal CarDekho is GirnarSoft's most successful and biggest business till date.
On the other hand, the Mumbai headquartered CarTrade has an employee count of 2,000. This figure includes the 600 employees it recently added when it acquired CarWale in 2015. According to a report in a national daily, the company may end up hiring up to 1500 more employees this fiscal year.
It is important to note that both these startups were bootstrapped for a significant period of time in their initial startup stage and as a result have established themselves on solid fundamentals. Founded in the year 2005, CarDekho opened its funding account only in the year 013 with a $15 million funding.
Reportedly, CarTrade has raised $175 million till date and CarDekho has raked in $65 million so far in funds.
[ Top Image Credit - Shuttestock ]
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