Spinny, a Gurgaon-based startup that operates a platform to facilitate purchase and sale of used cars, is the latest firm to become a unicorn in the world’s second largest internet market.
Spinny has raised over $280 million in its Series E financing round, a source familiar with the matter told TechCrunch. The round, which is co-led by Tiger Global and Abu Dhabi Growth Fund, values Spinny at over $1.75 billion post-money, the source said.
This is the third funding round raised by Spinny this year. The startup was valued at about $700 million in July this year and $350 million in April.
The new round follows quarters of strong growth that saw Spinny expand to 15 Indian cities, up from fewer than half a dozen last year. The startup has grown its business by four times in the current calendar year, the source said, requesting anonymity as the figures are not public.
Spinny, which counts Elevation Capital and Accel among its existing backers, did not immediately respond to a request for comment.
Hundreds of thousands of used cars are sold in India each month. But buying them through the offline and traditional channel could prove to be a painstakingly long and high-risk process.
One of the biggest challenges people face in buying a used car is the trust factor, Niraj Singh, co-founder and chief executive of Spinny told TechCrunch in an interview earlier this year.
Spinny is addressing this by removing the traditional middlemen from the equation, thereby making it more affordable and reliable for customers to buy a used car. The startup buys cars from the owners, performs thorough and transparent inspection and then makes it available for customers to purchase.
If a customer is not satisfied with the car that they have purchased from Spinny, they get a full refund, the startup says on the website.
The growth potential for Spinny and some other startups operating in this space is massive. The market for auto e-commerce currently has less than 1% penetration in India, according to analysts at Bernstein.
“This is largely because the auto market still requires physical inspections and the target market skews towards used vehicles — an unorganized market,” they wrote in a report earlier this year.
“The total addressable market in India is around $220 billion, which includes used vehicle purchase by consumers, auctions and remarketing, growth potential for the new vehicles market, and financing and advertisements. The total addressable market for only the used car market in US is over $800 billion,” they wrote in a report earlier this year.
Spinny is the second Indian startup to become a unicorn this week. India has produced over three dozen unicorns this year — more than all other years put together — after several high-profile global investors, including Tiger Global, SoftBank and Falcon Edge Capital, began to double down on the world’s second-largest internet market earlier this year at the height of the ravaging pandemic.
In a letter to shareholders earlier this year, Tiger Global identified India as one of the few markets where it was planning to deploy billions of dollars. SoftBank Group chief executive Rajeev Misra said earlier this month that the Japanese firm has invested more than $3 billion in India this year and can invest up to $10 billion in the country next year.