CarTrade shutters OLX's auto sales biz two months after buying it
CarTrade bought OLX's auto business for Rs 537 crore in July "to provide synergistic benefits to the existing businesses" of the company, it had said.
CarTrade Tech has decided to shutter the OLX auto business it acquired over two months ago, the online auto company said in a filing with the stock exchanges.
The company said it will retain OLX's classified business but will be shutting down its auto unit due to "unit economics challenges".
"The board of directors of Sobek at their meeting held on Wednesday have decided to shut down their own C2B (consumer-to-business) operations and reduce human resource and other administrative costs of the said business and explore partnerships with other players," the statement said.
had bought Autos C2B—also known as Sobek Auto India—as well as its classifieds business in a deal worth Rs 537 crore, a move it believed would result in synergies for both companies which have similar businesses.
Prosus-owned OLX had exited the auto business in March this year, and shut down many of its operations in countries around the world, including Argentina, Colombia, and Mexico.
Around 800 people, globally, were affected by the closure of the businesses. CarTrade's latest move will also result in headcount reduction, it told the stock exchanges.
"The Classified business (Olx.in—which includes both auto and non-auto verticals) of Sobek demonstrates profitability and substantial potential for future growth," the company said in the statement. OLX Classifieds has over 100 million downloads, currently, with products across categories such as electronics, real estate, furniture, clothing, etc being sold on it.
CarTrade, fresh from a pandemic-induced surge in second-hand car purchases, made its stock market debut in 2021 after securing investments from Temasek Holding and Tiger Global. It competes with , , , and , among others.
It was also reportedly in talks to acquire beleaguered car servicing startup GoMechanic at a valuation of $30 million, a steep haircut from its valuation of $283 million after the startup admitted to misleading investors and failing financial compliance.