German media company Axel Springer and the India Today group have together acquired a majority 70.4% stake in auto classifieds business Of, Axel Springer has picked up 52.1% stake, while the India Today group has bought 18.3% stake. Note that Axel Springer and the India Today group already have a 49:51 joint venture partnership in India to publish the fortnightly magazine Auto Bild. The acquisition of Carwale is a natural extension of this partnership. Mahesh Murthy, partner at Seed Fund told MediaNama that both Seed Fund and Sierra Ventures have exited completely, and the remaining stake is held by the promoters of Carwale, including CEO Mohit Dubey, and employees as ESOPS. There are options for the promoters to exit in the future, based on pre-agreed norms; the promoters have sold some stake in this deal.

Carwale had raised $7 million from Sierra Ventures in 2008, and Dubey had told MediaNama that they weren’t looking at raising another round. The company had closed the 2007-08 fiscal year with revenues of almost Rs. 4 crores, and according to industry sources their revenues are likely to be around the Rs. 6-8 crores range now.

This is the second acquisition in the online auto classifieds space in India: in August last year, was acquired by MotorExchange, which was subsequently funded by Canaan Partners. Carwale claims to be the market leader, with “a wide margin” in the auto classifieds space in India, with 1.3 million unique users and more than 17 million page impressions per month. Carwale competes with multiple auto classifieds portals in India, including Consim Info owned IndiaAutomobile,*(please read disclosure below), AutoIndiaCarazoo CarSalesIndiaDriveInsideIndimoto, among others.

bagitBag It Today

In addition to this, Axel Springer has also picked up 19.1 percent in the Indian discount buying business Bag It Today. Bag It Today is a 100% subsidiary of the India Today Group. BagItToday claims to have more than 3 million registered users. Axel Springer has also acquired the option of increasing its stake in BagItToday, and take a majority stake in the company. The investment has come in just a few months after India Today brought on board former NDTV Convergence COO Salil Kumar as CEO. What we don’t know yet, is whether Bag It Today will take on a TV avatar, like Homeshop18.

Carwale Raises $7 Million From Sierra; Isn’t Looking At Another Round
India Today Group Launches Premium E-Commerce Portal BagItToday

*- Disclosure: is owned by Accentium Web, founded by my cousin Vivek Pahwa.