Indian used car retailing platform Spinny enters the unicorn club after raising $283 million in its Series E funding round from new and existing investors. The round was led by Abu Dhabi-based ADQ, Tiger Global and Avenir Growth.
The round includes a primary capital infusion of $250 million and a secondary sale of $33 million by angels and a few seed-stage investors. The additional funding takes the overall funds raised by Spinny so far to more than $530 million and after this round, Spinny’s valuation stands at around $1.8 million.
Spinny is witnessing positive contribution margins from five of the 15 cities it currently operates in and aims to be break-even at a company level in another 1.5 years to 2 years’ timeframe.
The Indian used car market
According to Mordor Intelligence, a market research firm, India’s used car market was valued at USD 27 billion in 2020. It is expected to reach USD 50 billion by 20206, registering a CAGR of 15 percent during the forecast period, 2021-2026.
The report said that the COVID-19 pandemic had a minimal impact on the industry. With the increased number of people preferring individual mobility and more finance options infused into the used car market, the market is set to grow considerably.
Reduced cash inflow due to the pandemic has forced buyers to look for alternatives other than new cars, and the used car industry has excellent growth potential in these terms. With the sales and production of new vehicles hindered due to the pandemic, the immediate option for the buyers is the used car market.
In addition, experts believe that there is confusion in the market regarding the adoption of EVs and government policies around it. It has prompted many potential buyers to look for second-hand cars with low investment and wait till the market is ripe for better adoption of second-hand vehicles.
Spinny’s growth story
Founded in 2016, Spinny currently has 23 car hubs across 15 cities – Delhi, Gurugram, Noida, Bengaluru, Mumbai, etc. The used car marketplace aims to expand to 25 cities by the middle of next year.
“The good thing about our growth is that it has happened without any major advertising and marketing spending. Almost 40 percent of buyers come to our platform due to word of mouth rather than any reference bonus. We have always had the lowest customer acquisition cost among our peers and plan to stay that way,” Spinny co-founder and CEO Niraj Singh.
The company said the gross merchandise value (GMV) on its platform in CY 2021 had grown 5X compared to last year to $300 million, and it expects to hit $1 billion in GMV next year. The company sold around 3,500 used cars on its platform in November and expected to close the calendar year at sales of 85,000-90,000 units.
Spinny will look to invest a large round of funding in strengthening its technology so that second-hand car buyers find its platform more transparent.