(Bloomberg) -- Cars24 Services Pvt. is raising $450 million in equity and debt from SoftBank Group Corp. and other investors, underscoring growing demand for used vehicles as Covid disruptions and systemic chip shortages crimp auto production.

The round values India’s largest used-car site at $1.84 billion, almost doubling from the end of last year. SoftBank, DST Global and Falcon Edge Capital are leading $340 million in equity funding, joined by Chinese social media giant Tencent Holdings Ltd. and existing backers. The startup is raising $110 million in debt financing, according to its statement on Monday.

A rapidly expanding economy and the coronavirus pandemic that’s making people shun public transport are helping to boost demand for used autos. Only two out of 100 Indians own a car, and the market for used vehicles could balloon to $100 billion or more within a decade, said Vikram Chopra, Cars24 co-founder and chief executive officer.

“It’s such an under-penetrated market that the only way to go from here is up,” Chopra said in a video interview.

Indian automakers are among a growing number of global players cutting production for lack of essential semiconductor components. Maruti Suzuki India Ltd., the nation’s biggest carmaker, expects output to plunge 40% in September after an 8% decline in August, while Mahindra & Mahindra Ltd. has warned September output could slide 20%-25%.

The used-vehicle market in India is dominated by street-corner mom-and-pop businesses and car buying is seen as a fraught process because sellers are unsure of getting the right price and buyers are uneasy about the vehicle’s condition. Internet startups like Cars24 are leveraging technology to make transactions hassle-free and transparent for both parties.

“People are buying fashion, ordering food and purchasing groceries online, and they want the same car-buying experience,” Chopra said.

Used-car sales in India are 1.5 times that of new autos, helped by prices which are typically 30% to 70% lower, he said. Cars24 will use the fresh funds to make investments in technology, expand overseas and boost sales of pre-owned two-wheelers.

Cars24’s fundraising surpassed an earlier target Bloomberg News reported, thanks to the debt financing. It’s starting conversations about an initial public offering and aims to go public in 18 to 24 months, a person familiar with the deal said at the time.

Chopra started Cars24 in 2015 with Mehul Agrawal, Ruchit Agarwal and Gajendra Jangid. The company, which says it has grabbed 90% of India’s online car sales, recently expanded to the Middle East and Australia and plans to launch in Southeast Asia and other countries by year-end. Chopra previously worked as an investment analyst at Sequoia Capital and founded online furniture retailer FabFurnish, after dropping out of Wharton’s MBA program. Cars24 uses artificial intelligence to assess and price vehicles using millions of data points, and to match supply and demand in 130 cities. It runs its own warehouses and refurbishing facilities, operates a fleet of transport trucks and employs drivers and car evaluators. It has also partnered with financing companies, helping buyers to obtain loans, and offers a no-questions-asked return guarantee for seven days.

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