Gaadi.com's Umang Kumar opens up on selling his company twice

Rarely do you meet entrepreneurs who sell their company twice. Umang Kumar has done exactly that, selling auto portal Gaadi.com twice within three years.

The first sale happened in 2011 when MIH Group, a subsidiary of the South African media group Naspers, acquired a majority stake in Gaadi Web Pvt Ltd, which runs Gaadi.com.

Then, in 2014, CarDekho.com, an auto portal operated by Jaipur-based multi-vertical consumer internet company Girnar Software Pvt Ltd, acquired Gaadi.com for an undisclosed sum.

Kumar, co-founder and CEO of Gaadi.com, told Techcircle.in in an interview that his philosophy had been quite simple on both the occasions.

"Why do founders start companies? To exit and make money. When Naspers offered the opportunity to make money, (we) grabbed the chance and said let's do it. The second time also, (it was) very much the same reason," he said.

Kumar said Gaadi.com got four term sheets in 2014 but he felt there was a need for consolidation and sold the company to rival CarDekho.

"The first time we sold, we were a profitable company. Back in 2011, the feeling about internet was not what it has been for a year and a half. We got a good deal and we sold the company. In the hindsight, I would have not sold if I would have known how big it would become in the long term," he said.

"The second time it was driven more from the need for consolidation. We got four terms from various firms but the best deal on the table was to drive consolidation. There were too many players in the auto vertical and driving consolidation between CarDekho and Gaadi was transformative to both the companies," he added.

Kumar has now been active as an angel investor and has invested in a bunch of startups including Buildzar, Kolabro and 91mobiles.com. He feels Series A and B funding rounds will become more difficult in 2016 and companies will have to prove their business models before raising capital.

"There will be a lot of deals, there will be a lot of seed-stage investing… but I think Series A and Series B funding will be a little harder. Startups will have to prove their business models and unit economics," he said. "As long as the fundamentals of the business are in place, they will get funding."