Gurugram-based automobile startup GoMechanic said Monday it has raised USD 15 million in Series B round led by Chiratae Ventures and Sequoia Capital, with participation from Mumbai-based Orios Venture Partners as the startup is looking to expand its business.
The company will use the recent funding to scale its operations and take the business to 30 cities from the current nine cities. It runs 215 mechanic centers and workshops, which it wants to expand to 1,000 by the end of 2021 across India.
Earlier in January this year, it raised USD 5 million in Series A round from Sequoia Capital and Orios Venture. Snapdeal founders Kunal Bahl and Rohit Bansal have also invested in the company.
Go Mechanic offers doorstep pickup and delivery of vehicles for repairing and servicing. It runs a network of franchise-owned stores which is operated and controlled by the company. India’s repair and servicing industry is expected to hit around USD 8 to 10 billion, per the founders of the company.
Started by Kushal Karwa, Amit Bhasin, Rishabh Karwa, and Nitin Rana in 2016, the company works with existing car repair garages around the country and provide them with the inventory of spare parts. It claims to have an inventory of 5000 spare parts and charges a fixed price to customers. According to the company its repair services are 40% cheaper than what is offered by the auto manufacturers and other businesses in the organized repair market. One of the reasons, the company has managed to keep the pricing lower is due to its active involvement with local and small garages, thus ensuring higher utilization of these mechanics shops.
According to Bhasin, working with the existing garages and workshops has helped the company to not overspend and put all their efforts into services that they want to offer.
“The car repair market is oversupplied, as there are more than 300,000 multi-brand garages across the country already. Because of this, you do not see a high utilization rate across garages on an average,” Bhasin told local media Mint.
Technology-enabled auto companies this year have managed to raise money despite a steep slowdown in India’s auto sector. Earlier this year CarDekho, an online platform that facilitates selling and buying new and second-hand vehicles, raised USD 70 million in Series D round from Chinese investor Ping An Global Voyager Fund. Its competitor Cars24 also raised USD 100 million led by London-based investment firm Unbound and Toronto-based KCK Global.