After CarDekho’s recent big funding round, more money is flushing in for startups in second-hand vehicle dealing market. GoZoomo, an online platform which helps buyers and sellers of used cars connect directly, has now picked up a $5 Million Series A round from existing investors SAIF Partners.
GoZoomo had earlier raised a $1 Million seed round from SAIF Partners last year. While the platform is principally similar to say a Quikr or other classifieds website, GoZoomo’s commission model is starkingly different from its competitors.
Arnav Kumar, CEO and one of the co-founders, says,
We don’t take commissions, but there are other ways to monetise transactions. Even dealers make only 30 per cent of their revenues through commissions on car sales, while the rest is made through upselling other products and services like accessories.
GoZoomo currently claim to be facilitating selling of over 200 used cars a month in Bangalore, while that same figure is expected to touch 150 in Mumbai, taking into account company’s June figures.
These numbers, despite presence of numerous competitiors, are set to rise. And availability of a huge market and a more consumer-focused working model will both help GoZoomo get a larger share. Kumar explains his point to me.
We are looking to disrupt an industry which is already worth 10bilion dollars. And we will only grow from here. India’s motorization rate is 18 per thousand inhabitants. US’s motorization rate is 791, Brazil’s motorization rate is 187. Used cars sales per thousand capita in India is 2.6. Compare that with US (129) & Brazil (17.8). In all verticals, we are seeing a movement from classifieds/ listing sites to transaction platforms that provide safety nets for buyers & sellers.
While most other classified listing platform rely almost completely on manual listing, GoZoomo has developed an in-house algorithm, which its platform uses to first identify potential sellers. Once identified, GoZoomo then talks to each of those sellers extensively, doing a thorough background check. These sellers are then listed on its platform, making it a verified listing.
In fact, considering how important verified listings have become these days, and how platform like Quikr have failed to keep a check on falsified ‘verified’ listings, GoZoomo’s approach makes sure consumers don’t really have to through the frustrations of fake phone calls/messages.
With fresh infusion of cash, Kumar says that GoZoomo has plans to expand operations to top seven metros where most of the secondhand car sales take place. The startup already has an office in Delhi for that purpose. The funding will also be used for marketing, branding and further building out a team. GoZoomo is looking to take its transactions up to 1000 per month.
GoZoomo however, will receive stiff competition from the likes of CarDekho, who while obviously being flush with cash, also have a much lager userbase. But then again, CarDekho and other such platform focus more on the dealer side, something which might hurt their progress and work in GoZoomo’s favour in the long run.