ACTIVE SALES AGENTS
CAR BUYERS VISIT SITE
CarDekho is a leading auto-tech and mobility financing company in India, operating auto sales, classifieds, finance, and insurance businesses. It serves 3.6 million emerging consumers, and a staggering 86% of Indian purchasers will visit the platform before buying a vehicle.
CarDekho’s market position gives it enormous power over the story of mobility in India, and in other emerging economies across Southeast Asia like Indonesia, Philippines, and Malaysia where it is expanding its presence. CarDekho’s insurance subsidiary, InsuranceDekho, is one of the largest digital insurance brokers in India. It enables millions of emerging customers to access insurance products and at the same time provides employment to over 10,000 active sales agents from Tier II and Tier III cities in India.
Overall, CarDekho’s products and services reach 3.6 million emerging consumers (defined in India as those with monthly household income less than US$600). Of these, the majority purchase vehicle insurance (3.3 million), but there is an increasing segment seeking used vehicles (300,000) and used vehicle finance (100,000).
The average used car buyer on CarDekho earns a relatively small salary or runs a small business and may not have a fully documented recurring source of income. Three quarters of those who accessed used car finance through CarDekho earn less than US$10,000 per year.
These low-income consumers are dramatically under-served. For instance, used car loan penetration is ~17% in India, compared to developed markets where penetration is ~75%.
CarDekho not only improves access to vehicle insurance and finance but has made a concerted effort to improve the quality of vehicles sold on its platform. It provides documentation on each vehicle that validates ownership and accident history, as well as promotes new and affordable EVs like those produced by Mumbai-based startup Strom Motors and existing manufacturers like Tata, some of which retail for as little as US$6,000.
CarDekho will be an important platform in enabling India’s transition to EVs. Tax incentives and subsidies across Indian states now mean it is realistic that low-income consumers can upgrade traditional petrol and diesel vehicles for EVs. In Q1 FY22, there were 3.3m searches for EVs on CarDekho’s sites.
Read more about the importance of improving access to mobility for India’s emerging consumers in our CarDekho Impact Note:
The LeapFrog Difference
LeapFrog invested in CarDekho in 2021. LeapFrog believes that balancing access to mobility with improvements in transport safety and environmental impact is key to delivering an overall improved quality of life to emerging consumers.
LeapFrog will leverage its long history and expertise in growing Indian insurance leaders, with prior investments in Mahindra Insurance Brokers and Shriram Group, to enhance the reach of CarDekho’s vehicle insurance products, expand its agency network, and explore opportunities to expand into health and life insurance.
A key part of the mobility story also involves enhancing the access of women and girls to both vehicle loans and purchases. This starts at the top in a traditionally male- dominated sector, and so LeapFrog obtained a commitment to place the first woman on CarDekho’s board of directors and will work with the company to improve diversity across its leadership team.
LeapFrog’s customer experience (CX) experts plan to continue to improve the CarDekho platform to serve low- income consumers seeking access to their first vehicle or to upgrade their existing vehicle. This will include expanding reach for CarDekho’s used vehicle finance products, which offer low-income consumers access to more affordable vehicles, but which banks typically eschew.
India is on the cusp of making EVs truly affordable, with a range of domestic manufacturers launching affordable EVs in a revolution similar to the proliferation of cheap petrol cars a decade ago. We believe it is important to help CarDekho both grow its reach into the emerging consumer segment, through improved delivery of its finance and insurance products, while also supporting the company to aggressively expand low emission vehicle sales across emerging Asia. LeapFrog’s capital will accelerate the portals growth into new emerging consumer markets and ensure affordable finance and insurance products can help catalyse an upgrade of existing vehicle fleets to EVs.
LeapFrog will work with CarDekho to improve safety and environmental programs across its platform, and to track and target key impact data including average selling prices, vehicle types, % first time buyer, EMI/income ratios and other factors that indicate CarDekho’s products are ever more accessible and affordable to emerging consumers.
Delivering and scaling a trustworthy vehicle marketplace, finance, and insurance experience for Asia’s emerging consumers will tackle many of the mobility access issues faced across the region, empowering people to escape poverty traps and to access new opportunities in employment, education, healthcare, and other essential services.
Investing in India
CarDekho is one of a number of exciting investments LeapFrog has made across India. Read more about our work delivering profit with purpose in India.