CarTrade Technologies is shutting down the auto sales division of its recently acquired business – OLX or Sobek Auto India Pvt. Ltd.
In an exchange filing, CarTrade informed about the strategic decision to shut down C2B operations of auto transaction business amid unit economics challenges.
The development comes two months after CarTrade acquired a 100% stake in Sobek Auto India for INR 535.54 Cr, which comprises the OLX Autos C2B transaction as well as the OLX classifieds business.
According to the automobile marketplace, Sobek will continue to grow its classified business. Meanwhile, shutting down of OLX’s auto sales division will also lead to headcount reduction.
“The Classified business (Olx.in – which includes both auto and non-auto verticals) of Sobek demonstrates profitability and substantial potential for future growth. Sobek has thus made the strategic decision to concentrate its energies and resources on the classified business, recognising its immense potential for sustained growth and value creation,” the company said in a statement.
As per CarTrade, OLX Classifieds currently has over 100 Mn downloads. With a wide spectrum of services across 12 diverse categories, including automobiles, real estate, electronics, and more, the platform claims to have almost 35 Mn unique visitors on a monthly basis and more than 30 Mn listings annually.
At the time of acquisition, CarTrade had informed that OLX India’s auto business was debt-free and held a cash reserve of INR 100 Cr. OLX India reported a consolidated annualised gross revenue of INR 1,837 Cr as of July 2023.
Shares of CarTrade, which has witnessed a sharp rally since the acquisition of OLX, were trading over 3% higher at INR 635.45 on the BSE at 2.10 PM IST, after the announcement today.
CarTrade competes with the likes of Cars24, Spinny, CarDekho, and Droom, among a few others. The startup reported an over 300% year-on-year rise in its profit after tax (PAT) to INR 13.5 Cr in Q1 FY24.
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