The quickly growing financial industry within India is now a very lucrative for non-financial companies. Startup businesses who aren't in the financial sector are entering into the industry to begin selling financial services that include credit cards, loans, and insurance.
Recently, home-grown cab hailing major Ola had applied for a non-banking finance company (NBFC) licence. Now Cars24, an online marketplace for buying and selling used cars has applied to the Reserve Bank of India (RBI) for an NBFC licence.
The Gurugram-based firm plans to start separate financing business under the Cars24 umbrella.
In order to expand its business, the company intends to offer vehicle loans. When a consumer buys the vehicle from the dealer we can be the financing platform for them, CEO Vikram Chopra quoted as saying by ET report.
Cars24 buys used vehicles from owners and sells them to dealers, fulfilling the end-to-end transaction. The firm earns revenue through a commission of about 4-5 per cent from each transaction. Three years old firm claims to have sold over 100k cars.
In 2018, venture capital firm Sequoia Capital India had led around Rs 340 crore round in Cars24.
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