Thursday, December 1 2022

“There are 140 million two-wheelers in India, and every year another 20 million two-wheelers are sold. Over $10 billion in two-wheeler funding supports this industry, but the customer experience is still stuck in the 1980s. financing documents and more. Each step is disconnected from the next and there are unnecessary delays everywhere,” shared Sumit Chazedco-founder and CEO of OTO Capital, when asked what led him to launch his automotive fintech platform that offers inventive financing options for the next generation of customers.

ITI Bombay Alumni Sumit Chazed and Severe Saruparia considered Capital OTO to provide a 10 times easier shopping experience for financing and owning a two-wheeler. Reinventing the digital experience for two-wheeler shoppers, OTO offers auto shoppers the ability to compare brands online, book unlimited free trials and make an informed decision. The startup was able to build a healthy customer relationship by curating user and expert reviews for a diverse class of two-wheelers. The company claims to offer the buyer one of the lowest prices and fastest availability of any major model in town. Their financing option offers a simpler leasing model for two-wheeler purchases where buyers pay an upfront payment like any other loan, pay up to 30% less EMI, and have the option of owning the two-wheelers at the end of the mandate. or send it back to OTO.

This Bengaluru-based startup offering services in 10 cities including Hyderabad, Chennai, Pune, Delhi, Ahmedabad, Indore among others has grown 8x in the last 12 months. It aims to sell over 70,000 two-wheelers and hit Rs 600 crore annual payout by March 23.

Understand OTO’s business model

The startup has forged strategic partnerships with big brands like Hero, Honda, Suzuki, Bounce and many more to seize new opportunities and acquire a new set of customers through the digitization process. The company has partnered with various banks and non-bank financial companies (NBFCs) to offer differentiated products to customers and create a diversified portfolio in a new class of secure assets without any marketing and operating costs for them. Banks and NBFCs have committed Rs 350 crore under this partnership for the next 12 months. The startup also ensures the complete management of the life cycle of the automobile, from the subscription of credit to the insurance, the maintenance and the possible resale of the vehicle to its partners.

The business model was designed to guarantee absolutely no loss after the initial down payment and three EMIs. This asset-backed secured loan has NPAs at 0.5% compared to its peers. There is a 90% NACH activation rate followed by multiple revenue streams at the time of sale and throughout the product life cycle.

OTO has been able to secure reservations for over 30,000 bikes so far. This one-stop-shop platform has been able to generate links with over 500 dealerships and aims to increase it to around 2700+ in 50 cities by 2025. The startup has become the The flagship of electric vehicles in the Indian automotive market and has seen 19x growth in electric vehicle sales in the last financial year itself by offering innovative financing programs such as the ability for customers to opt out of electric vehicles within 12-24 months of purchase and reduced EMI due to attractive interest rates.

OTO has partnered with major players in the electric vehicle market, including Hero Electric, Okinawa, Ampere, and Bounce, among others. Through their programs like the OTO Rider Empowerment program, it aims to benefit the last mile logistics market with the delivery fleet. It plans to set a higher benchmark next year by recording electric vehicle sales of Rs 250 crore, disrupting the e-mobility market.

Meet the Founders

Summit, the co-founder and CEO of the company, was baptized under Forbes Asia 30 under 30. His previous stint at CredR gave him the opportunity to serve over 100,000 customers in the used vehicle segment, which pushed him to start his new business. OTO. One of his early ventures, Coursewave, was aimed at a disruptive e-learning engagement model he co-founded during the days of IIT, which was acquired in 2013.

“My time at CredR gave me the insight that next-gen customers like to upgrade faster and want to have a minimum commitment to ownership that isn’t possible with existing options. With OTO’s digital finance and commerce platform, we envision reinventing two-wheeler ownership for millions of Indians. OTO aims to present Indians with a ten times easier, faster and more convenient way to buy , finance and own their two-wheelers,” he says.

Hardthe co-founder and CTO, is a strategic leader and is one of the driving forces behind OTO’s success in creating and conceptualizing products and developing advanced technologies to streamline processes, resulting in increased productivity, customer engagement, customer loyalty and revenue streams.

“OTO’s innovative platform has redefined two-wheeler ownership with more personalized, digital and on-demand services. Technological innovations such as those provided by OTO are fueled by changing customer behavior. With electric two-wheelers added to the mix, OTO aims to become the default app for Indian shoppers to reduce noise and achieve a two-wheeler shopping experience that has never existed before,” Harsh says.

The impact

The team is the first Indian startup to commit to facilitating the financing/rental of two-wheelers through an e-commerce platform. Ownership and purchase patterns are changing, especially in the new generation, i.e. among Millennials and Gen Z. The incumbent customer from India is looking for a digitized platform for purchasing two- wheels and affordable financing options. The moment the customer comes in for auto finance, KYC is tracked on the OTO app, with every step being digitized. Through their strategic partnerships with dealerships and automakers, they can serve customers seated in the comfort of their own homes, from discovery to delivery.

The startup has successfully raised funds from Matrix Partners, Prime Venture Partners and Venture Catalysts along with serial entrepreneurs K Ganesh and Sameer Sawhney. They raised three rounds generating $10 million.

With an efficient economy, the startup progresses rapidly in its growth trajectory. The timing is perfect for OTO Capital – digitalization, electric vehicles and the gig economy are the new deal.


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