CarTrade Tech, a Mumbai-based company, is near the completion of the acquisition of the rival CarDekho in a transaction worth more than $1.2 billion, as per the sources cited by Moneycontrol.
The agreement that is anticipated to be a combination of cash and stock has already gone through the due diligence phase and the only thing left is the negotiation of the final terms.
The merger, if accomplished, would unite two of the largest online auto marketplaces in India, the CarTrade group comprising CarWale, BikeWale, and OLX India, and the consumer-facing platforms of CarDekho, thus, creating a leader in the Indian auto-tech market which is rapidly changing.
The merged company would raise the competition level to a whole new area for the likes of Cars24, Spinny, and Droom.
CarDekho became the first Indian unicorn from Rajasthan after a $250 million pre-IPO funding round led by LeapFrog Investments and Sequoia Capital India, valuing the company at around $1.2 billion in October 2021.
However, the ride since then has not been smooth. CarDekho ceased its used-car retail operations in 2023 following heavy losses and unsustainable costs related to parking, manpower, and showrooms. The company later redirected its efforts away from high-burn retail toward profitability in segments such as auto insurance and financing.
InsuranceDekho, the company's insurance division, has become a growth engine with FY24 revenue expanding almost eight times to ₹743 crore, whereas the group's losses have decreased by 40% to ₹340 crore. The firm now generates close to ₹930 crore from transaction-driven verticals such as advertising, dealer integrations, and financing services.
CarTrade is a profitable and debt-free company, unlike most of its competitors. The company, which is the owner of Shriram Automall India Ltd (SAMIL), announced a 29% year-on-year revenue increase to ₹222 crore in Q2 FY26 and a net profit of ₹64 crore, which is more than double the figure of the previous year.
CarTrade is sitting on a war chest of ₹1,080 crore and boasts 85 million monthly users across its platforms, meaning that the company has both the scale and liquidity required for making big acquisitions. The timing couldn’t be better as the market is now consolidating around growth that is sustainable and driven by scale rather than by the burning of cash aggressively.
Upon completion of the acquisition, the merger would integrate the B2B strength of CarTrade - dealer auctions, remarketing, and financing - with the B2C focus of CarDekho in listings, digital retail, and insurance.
As a result, they might construct the first full-stack digital auto ecosystem in India comprising the whole vehicle lifecycle - discovery, financing, insurance, resale, and trade-ins.
The possible $1.2 billion merger between these two companies is an indication of a bigger transformation going on in the Indian startup ecosystem - a move from chasing valuations to creating value. It is a signal for the auto-tech industry in India that wave of consolidation has arrived leading to the survival of only the strongest and most profitable players.
The CarTrade and CarDekho deal will, if signed, be the next big thing to not only change the face of online auto sales but also, possibly, the way India purchases, sells, and insures vehicles in the digital age.
