The company has managed to reduce its burn rate by around 50% from its peak at the end of 2021, Jangid said. “Directionally, we want to go further down (on the burn-rate number),” Jangid said.
Cars24 filed its 2021-22 financial results with the Registrar of Companies on Tuesday.
It has reported an 87% year-on-year jump in revenue from operations to Rs 5,136.53 crore. Net loss has widened to Rs 248.07 crore in FY22, from Rs 191.54 crore in 2020-21 (FY21).
Its operational revenue also includes the non-banking financial services business, which had a revenue of Rs 75 crore.
Discover the stories of your interest
Consolidated FY21 revenue was from a lower base because of Covid19-led lockdowns that had an impact for at least a quarter.
The SoftBank and Alpha Wave Global-backed company has also shifted much of its business from branch or store-led car inspection and sales to one led by home inspections.
During FY22, the business shifted from being 90% store-led to 90% home-inspection-led.
This, Jangid said, took place due to a change in customer preferences in the aftermath of the pandemic.
Cars24 has also hit pause on its ambitious international foray following back-to-back funding in 2021. It now plans to be present only in its existing three markets – Thailand, the UAE and Australia.
ET reported in July that
the company was shifting gears after firing a significant chunk of its workforce.
At the time, the company was planning to cut down its burn rate from $20 million a month to $10 million per month.
Jangid said the company was projecting better topline and bottomline numbers in the ongoing financial year. The growth expectations, he added, have also been realigned within the company.
“Of course, there is a realignment in expectations of growth. The rate of growth that used to be will not be there but there will be growth. However, this growth has to now come at a much lesser cost. That’s the only way to build a healthy and sustainable business,” he said.
While the company’s international business was clocking lower-than-expected growth, its focus remained on the spending rate. “Even if the growth numbers (in international markets) are lower than what we were hoping for, we should not be burning any more money — we are playing very cautiously,” he said.
In December last year,
Cars24 had closed a $400-million funding round including debt, after which it was valued at $3.3 billion.
The round was led by Alpha Wave Global, formerly Falcon Edge Capital. It included a $100 million debt component that was sourced from investors like Commercial Bank of Dubai and IFM Investors in Australia.
“As a business, I want to reduce my dependency on external funding. That’s the ideal situation so that I don’t have to change my strategy based on what the external environment is. Our biggest learning in the last six months to one year has been that we have to decouple our plans and strategy,” Jangid said.
Founded in 2015 by Vikram Chopra, Mehul Agrawal, Ruchit Agarwal and Jangid, Cars24 became a unicorn in 2020 in a $200 million funding round led by DST Global.
Other major players operating in the space are Tiger Global-backed Spinny and CarDekho, in addition to the used-car sales verticals run by automakers like Maruti Suzuki and Mahindra & Mahindra.
“We have plenty of runway because of our last funding that we raised (in 2021), and now we’re playing a game where we want to continuously reduce our burn and decouple any dependency on external funding,” he added.
For all the latest Technology News Click Here
