Vehicle Financing Startup OTO Raises $6 Mn In Series A Funding Led By Matrix Partners India
The company will use this funding to scale its user base and becoming the default app for two-wheeler buying and financing for 20 million Indians who purchase two-wheelers every year
OTO, a two-wheeler buying and financing innovator, on Tuesday announced that it raised $6 million in a Series A investment round led by Matrix Partners India. This also includes participation from existing and new investors such as Prime Venture Partners, 9Unicorns and Better Capital and angel investors like Asish Mohapatra, OfBusiness; Ramakant Sharma, Livspace; Nitin Gupta, Uni; Ranga, Five Star Finance; Kunal Shah; K Ganesh and Ashneer and Suhail, BharatPe.
The company will use this funding to scale its user base and becoming the default app for two-wheeler buying and financing for 20 million Indians who purchase two-wheelers every year.
“We are re-imagining the two-wheeler buying and ownership experience for millions of Indians. Customers can research, schedule test drives at home, avail innovative and flexible financing options, and complete the purchase journey via our OTO platform. With electric two-wheelers added to the mix, OTO aims to become the default app for Indian buyers to cut through the noise and get a two-wheeler buying experience that has never existed before,” said Sumit Chhazed, co-founder, OTO Capital.
OTO is currently present in five cities - Chennai, Bengaluru, Pune, Hyderabad, and Mysore. With this investment, the company plans to launch its financing-cum-commerce platform in 15 new cities including, Delhi, Nashik, Indore, and Vijaywada.
To drive this growth, OTO will double its team size by March 2022 and plans to hire aggressively across verticals, especially technology, product, marketing, and operations
“In the world’s largest two-wheeler market (India), the consumer’s preference is changing – buying online, stretching their budget for quality, and upgrading faster. OTO caters to this new consumer with a new model of buying, financing, and ownership. We’re believers in the financing and commerce model and excited about the journey ahead for OTO. We’re privileged to back Sumit in this company and look forward to forging a great partnership with the team and the outstanding investor group,” commented Vikram Vaidyanathan, managing director, Matrix India.
Started in 2018, OTO operates on a simple financing model for two-wheelers where the buyer pays an upfront amount like any other loan but gets up to 30 per cent lower EMIs with an option to retain, return or upgrade at the end of the tenure.
The platform works in partnership with various banks and non-banking financial companies (NBFCs) to provide the most hassle-free financing options to its customers. It also provides full auto lifecycle management, from credit underwriting to insurance, maintenance, and eventual resale of the vehicle.
“OTO is transforming the shopping, financing, and ownership of two-wheelers, enabling OEM’s dealers and distributors to benefit from the consumer transition to e-commerce and self-service. We’re delighted to welcome Matrix Partners, Better Capital, and some amazing angels/entrepreneurs to join us in this exciting journey to transform this industry of more than 20 million new vehicles, particularly as it transitions to connected Electric Vehicles in near future,” Sanjay Swamy, managing partner, Prime Venture Partners.
Despite the COVID-19 pandemic, OTO claims to have grown fourfold in the last 12 months while maintaining less than 1 percent NPAs. More than 30 percent of the company’s transactions were sourced and completed digitally. OTO’s growth and collection performance garnered strong interest post-pandemic from various banks and NBFC’s and got it multiple lending partners with the commitment of lending over INR 250 crore on OTO platform for the next 12 months.
OTO has also established successful partnerships with all major brands such as Hero Motocorp, Honda, Suzuki, Hero Electric, and more through their dealerships.