Cars24, a leading e-commerce platform for pre-owned vehicles, has reportedly laid off around 200-250 employees this month as part of a broader cost-optimization strategy, according to sources familiar with the matter.
Departments Affected in the Restructuring
The layoffs primarily impacted the product and technology divisions, reflecting a strategic restructuring move. According to one insider, the decision was not performance-related but aimed at aligning operational efficiency with the company’s long-term goals.
Competitive Pressure and Industry Landscape
The layoffs coincide with a crucial development in the used-car sector, as Spinny, one of Cars24’s key competitors, recently raised over $131 million from Accel’s Leadership Fund. The funding injection strengthens Spinny’s position, intensifying the competitive landscape for Cars24.
Severance Packages and Company’s Response
Sources indicate that SoftBank-backed Cars24 has provided standard severance packages to the affected employees. Addressing the layoffs, Vikram Chopra, co-founder and CEO of Cars24, stated:
“This is a tough decision. Over the past few weeks, we’ve had to part ways with around 200 employees across various functions. We are deeply grateful for their contributions. The layoffs are not about performance, but about structure and the bets we placed. We’ve learned that speed without clarity is expensive, and some projects and roles were added prematurely. Moving forward, we need to be more strategic and deliberate with our investments and team-building.”
Funding History and Valuation
Cars24 has not raised external capital in the past three and a half years. However, in December 2021, the company secured $450 million in funding from major investors including SoftBank, Tencent, DST Global, and Falcon Edge’s Alpha Wave, which valued the company at $3.3 billion.
According to data from TheKredible, DST Global holds the largest external stake in Cars24, followed by KCK Limited. Other prominent investors include Peak XV, Alpha Wave, and Tencent.
Financial Performance
Cars24 has not yet filed its FY25 financial results. However, in FY24, the company recorded a 25% year-on-year revenue growth, increasing from Rs 5,530 crore in FY23 to Rs 6,917 crore. Despite the revenue surge, Cars24 reported a net loss of Rs 498 crore and an adjusted EBITDA loss of Rs 318 crore for the fiscal year.