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This Indian startup wants to revolutionise the country’s used car industry, raises $280M

The Indian passenger vehicle (PV) market, which has shrunk significantly since FY2019, is likely to revive in the following years. According to a study commissioned by Volkswagen India and conducted by Frost & Sullivan, used car sales are expected to outweigh new car sales by more than 2:1 by FY2025.

As per the study commissioned by VW India, pre-owned car sales are currently 1.5 times higher than new car sales, but the difference is expected to widen in the future years.

The report found that 64% of pre-owned vehicle customers are first-time automobile buyers. The used car market is frequently regarded as an unstructured place, and for the time being, it is, with organised dealers accounting for only 25% of sales. However, due to more coordinated efforts by larger competitors and an increased willingness of customers to pay a premium for more reliable cars, their market share is expected to rise to a considerable 45% by FY2025.

India’s used-car market was valued at $24.24B in 2019. This is expected to rise at a 15.12% CAGR between 2020 and 2025.

Last year, the United States and the United Kingdom had a used car to new car sales ratio of 2.8:1 and 4.1:1, respectively, among the world’s major automotive markets. 

Meanwhile, Spinny, a Gurgaon-based firm that provides a platform for the buying and selling of old automobiles, has become a unicorn after receiving $280M in a Series E round from new and existing investors. The funding round was co-led by Tiger Global and Abu Dhabi Growth Fund, and it takes Spinny to over $1.75B post-money valuation.

The proceeds come after the startup secured more than $100M in its Series D round four months ago.

Spinny Plans To Remove Middlemen

With the fundraise, Spinny plans to remove traditional intermediaries and therefore making used car purchases more inexpensive and reliable for clients. The firm acquires automobiles from their owners, inspects them thoroughly and transparently, and then makes them accessible for purchase by clients.

Spinny has expanded to 15 Indian cities, up from less than a half-dozen last year, thanks to rapid growth in recent quarters. In the current calendar year, the startup has quadrupled its revenue, the company reportedly revealed in a statement.

One of the most difficult aspects of buying a used car is establishing trust, Niraj Singh, co-founder and CEO of Spinny was quoted as saying. 

As per the startup’s website, if a consumer is dissatisfied with the car they purchased from Spinny, they will receive a complete refund.

Spinny, as well as several other firms in this field, has a lot of room to expand. According to Bernstein analysts, the market for vehicle e-commerce in India currently has less than 1% penetration.

Spinny is now the fourth startup in the used automobile industry to achieve unicorn status. Cars24, CarDekho, and Droom had previously joined the exclusive club of unicorns. 

The startup which was founded six-years back operates in more than 40 cities, according to its website, including Delhi-NCR, Bengaluru, Mumbai, Kolkata, Chennai, Hyderabad, Lucknow, Ahmedabad, and Pune.

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