With 2021 having scripted a remarkable turnaround for the Indian start-up ecosystem, firms have reached record highs. This has attracted many global investors, and the massive inflow of capital has enabled 25 Indian start-ups to evolve into unicorns. That effect has also trickled down well into early-stage financing, with multiple startups raising heft investments amid revival.
Adding to that list today, is OTO Capital, a start-up that specializes in helping customers buy or lease two-wheelers with ease, raised $6 million in a Series A funding round led by Matrix Partners India.
Other participants in the funding round included new and existing investors including Prime Venture Partners, 9Unicorns, and Better Capital, as well as marquee angel investors such as Asish Mohapatra of OfBusiness, Ramakant Sharma of Livspace, Rangarajan Krishnan of Five Star Business Finance, Nitin Gupta of Uni, Kunal Shah, K Ganesh, and Ashneer Grover & Suhail Sameer of BharatPe. According to OTO, the proceeds from the funding round will be utilized towards increasing its user base to become the app for buying and financing.
Additionally, it plans to expand its team and hire aggressively across verticals, especially technology, product, marketing, and operations as it aims to launch its services in 15 new cities, including Delhi, Nashik, Indore, and Vijayawada. Currently, it is present in Chennai, Bengaluru, Pune, Hyderabad, and Mysore.
The three-year-old OTO, founded by Sumit Chhazed and harsh Saruparia, is known for offering a leasing-like financing model for the purchases of two-wheelers – the customer pays an upfront amount and gets up to 30% lower EMIs with an option to retain, return or upgrade at the end of the tenure. OTO also offers full auto lifecycle management, from credit underwriting to insurance, maintenance, and eventual resale of the vehicle.
It claims to have grown by four times and kept its non-performing assets below 1% in the last 12 months even as the pandemic raged across the world and forced many companies to shut down and focus on remote working. OTO works with banks and NBFCs in order to provide hassle-free financing options to its customers.
In fact, its strong growth resulted in the inflow of over ₹250 crores as lending for the next 12 months. It has worked with established names such as Hero Motocorp, Honda, Suzuki, Hero Electric.
“We are re-imagining the 2-wheeler buying and ownership experience for millions of Indians. Customers can research, schedule test drives at home, avail innovative & flexible financing options, and complete the purchase journey via our OTO platform. With electric 2-wheelers added to the mix, OTO aims to become the default app for Indian buyers to cut through the noise and get a 2-wheeler buying experience that has never existed before,” said Sumit Chhazed, co-founder, OTO Capital.
“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,” said Sanjay Swamy, Managing Partner, Prime Venture Partners.
