After Ola, used cars marketplace Cars24 applies for NBFC licence to start lending

Gurugram-based Cars24, an online marketplace for buying and selling used cars, applies for NBFC to enable lending from its own platform. 

Cars24, the Gurugram-based online marketplace for buying and selling used cars, has applied to the Reserve Bank of India (RBI) for an NBFC (non-banking finance company) licence to start lending from its own books. This comes soon after cab- and auto-aggregator unicorn Ola applied for an NBFC license for its wallet, Ola Money.

According to media reports, Cars24 founders see great opportunities in the lending business and want to start a separate entity to enter the fintech market.

Founded by FabFurnish founders Vikram Chopra and Mehul Agrawal, Cars24 follows a customer-to-business (C2B) model. It buys cars from individuals and sells them to dealers. Unlike a classified platform, Cars24 enables end-to-end transactions and charges commission for each transaction.

Last year, Cars24 had raised $50 million from Sequoia Capital and existing investors, and was estimated to be valued at $250 million. Sequoia Capital is also an investor in CarDekho, Car24's competitor. Cars24 also competes with Quikr Auto, Olx and CarTrade.

ALSO READ: Market for used cars in India

Bengaluru-based Ola, on Monday, had applied for NBFC license for its wallet as well. According to reports, Ola is planning to deepen the credit service for its riders, Ola Credit. Moreover, Ola is also planning to partner with a bank and launch a credit card to strengthen its insurance plans, both for its riders and driver partners.

According to sources outside the company, the ride-hailing unicorn might be taking these steps to ensure that the Japanese conglomerate SoftBank does not acquire anymore stake in it. The development comes as means for founders Bhavish Aggarwal and Ankit Bhatti to retain more control in the company by setting up Ola Money and Ola Credit as separate entities.