India’s used-car startups, including Cars24, Spinny and Droom, are tapping new segments, forging partnerships and consolidating operations as they pursue more stable revenue and profit growth in a tough-to-crack market still dominated by unorganized local players.
SoftBank-backed Cars24 has continues to expand its use of artificial intelligence (AI), while diversifying into personal loans and credit-score services alongside car financing. Similarly, Spinny has partnered with original equipment manufacturers (OEMs) to build a certified pre-owned electric vehicle (EV) ecosystem as green mobility picks up pace.
A decade after these businesses first emerged, analysts say profitability has remained elusive for the big names, which is showing up through layoffs at erstwhile unicorn Droom over the past six months following a similar exercise at Cars24, which eliminated 200 jobs in April 2025.
“They (used car players) need to be slightly sharper on the cost side; the margins will follow. The diversification we are seeing, whether through collaborations with OEMs or entering other sectors, could be a reflection of this,” Som Kapoor, partner and leader, future of mobility, EY-Parthenon India, said.
India’s used-car startups struggle to turn a profit because the market remains highly fragmented and dominated by unorganised dealers. Unlike local dealers, organised platforms bear higher costs for vehicle inspection, refurbishment, technology, and customer acquisition. Also, holding inventory ties up capital and exposes them to depreciation and demand fluctuations.
According to a Redseer report released in June 2026, nearly 79% of India’s used-car transactions still take place through unorganized channels. The used-car market, currently valued at $53 billion, is projected to reach $68-78 billion by FY31.
Droom feels the squeeze
Droom has seen its valuation slump from $1.2 billion in 2021 to $360 million in 2025. Revenue declined from a peak of ₹390 crore in FY22 to ₹164 crore in FY26. Its FY26 numbers are provisional, according to a valuation report dated 13 May.
The company is now in no rush for a public listing, instead focusing on monetising the digital infrastructure and AI products it has built.
“We have built a lot of digital infrastructure for mobility, and we want to leverage that. So, going forward, I would say we want to leverage what we have built as digital infrastructure and try to have a larger portion of AI at growth,” said Droom founder Sandeep Aggarwal.
Some of Droom’s AI products include Droom Rental, an AI-powered rental platform, and MyDroom, its predictive planning tool that provides insights on vehicle health, repair forecasts, insurance renewals and smart mobility planning.
Aggarwal acknowledged the layoffs at his company but declined to specify the number of jobs affected. He also acknowledged some delays in gratuity payments, which he said would be resolved soon.
According to four former employees Mint spoke to and data from the EPFO portal, Droom’s workforce has nearly halved. EPFO data show that the number of registered employees fell from 142 in March 2025 to 69 in May 2026. Mint could not independently ascertain how many of the departures were due to layoffs.
Cars24, Spinny broaden bets
Gurgaon-based Cars24 has expanded beyond its core used-car marketplace over the past two years, including new car sales, personal loans, and credit-score services alongside car financing.
Its most recent move has been a push into AI. Cars24’s AI strategy began with integrating the technology into its core operations, followed by the launch of a dedicated $20 million AI Labs initiative in June. It has now expanded into a separate enterprise AI venture, Deployment Inc., with a $5 million commitment.
“On the used car business itself, it is hard for three reasons. Every asset is unique. The journey needs long assisted handholding. The operations are complex. We have spent years solving those three, and the unit economics are now in place, with the consumer business growing over 40%. AI is the second unlock. It lets us do all three at a much lower cost as we scale,” said Shivanshu Makkar, who leads finance, strategy, and governance at Cars24.
Some of its bets seem to be paying off. The company reported a 27% jump in adjusted net revenue to ₹1,411 crore in FY26, from ₹1,108 crore in FY25. Its Ebitda loss narrowed 36% to ₹357 crore.
“This is not a pivot. Used cars remain our core and the largest part of the platform. What has changed is how we see the customer. We are not in the business of a single transaction. We are in the business of vehicle ownership, and the ambition is simple: better drives, better lives,” Makkar said.
Attempts to build new revenue streams are also visible at used-car marketplace Spinny, which has partnered with OEMs, including JSW MG Motor India and Nissan Motor India, to build a certified pre-owned EV ecosystem and enable faster vehicle exchanges. The company also recently partnered with CarTrade to improve the buying and selling experience for consumers.
Spinny recorded a 24% rise in revenue in FY25 to ₹4,746 crore while its net loss narrowed to ₹424 crore from ₹590 crore.
“As the automotive ecosystem evolves, we see an opportunity to play our part across more of the ownership journey, whether customers are looking to discover a new car, sell their existing car, buy a pre-owned vehicle, upgrade to a new one, or move from an ICE vehicle to an EV. That’s the clear intent behind our partnerships with OEMs and automotive platforms,” Niraj Singh, founder and chief executive, Spinny, said.
Industry experts say trust remains one of the biggest challenges for India’s used-car marketplace ecosystem. Vinay Piparsania, founder at MillenStrat Advisory and Research, said a large part of the used-car ecosystem continues to operate through networks of independent brokers and dealers.
“Customer awareness is low and the trust deficit is high. On top of that, customers don’t find enough value in OEM-certified pre-owned cars. There are too many variables in used cars without specific expertise being offered in the existing market,” he added.