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MotorExchange raises Series B funding, to hire 155 people
By Eureka Bharali, SiliconIndia
Mumbai: Vinay Sanghi, the CEO of MotorExchange has refurbished the offline experience of First Choice, the used car selling and buying platform, with the web 2.0 zing. The company, which Vinay asserts to be more like a national exchange like BSE and NSE for transaction of used vehicles, has recently raised an undisclosed amount of Series B funding from Epiphany Ventures and their existing investor Canaan Partners. Economic Times have stated in its report that the company has raised $5 million, however, both the investors and the company have denied it. The company had earlier roped in the Series A funding from Canaan Partners. With the new amount raised, apart from extending its services, MotorExchange plans to expand its team from current 70 to 225 employees in next one year.
The two founders Vinay and Rajan Mehra, who is the Venture Partner at Clearstone Ventures and has served as the Country Head for eBay, saw Manheim, a U.S. based portal which facilitates 10 million vehicle transaction. It was the right spark to do something in India and tab the huge market for used vehicles, which currently is worth $20 billion and is expected to reach $40 billion in next five years.
"It's a vast opportunity. We do have competitors like Carwale, but we are not mere an online marketplace for vehicles, rather a complete transaction platform. Wherein most of our sellers are institutional banks, corporates, fleet owners and consumers and the buyers comprise mostly of the vehicle dealers," says Vinay. The 2009 founded firm is a platform for used auto dealers, including dealers of cars, trucks and two wheelers, who gain access to a large pool of vehicles. Hence, it is based on both B2B and C2B business models. The main means of revenue flow for the company is the subsidy pay from the sellers. It's mandatory for the sellers to register under MotorExchange and pay a certain amount. Currently, the company's reaches out to institutional sellers in 80 cities. For consumers willing to sell their vehicles the service is available in Mumbai and Chennai and with the current round of funding, they are planning to extend the service to 10 cities.
A look at other firms like Carwale and Gaadi.com, one can see the compare contrast of the vehicles available, and bringing the same research bend, the company introduced CaradeIndia.com, an auto classifieds site. "The right blend of team wherein one has exclusive experience in dealing with used cars and the other's proficiency in the field of e-commerce has become the best bet for us. Apart from that, the company has kept its strategies straight. Even in terms of a secured transaction, the company has set proper protocols like certification reports," says Gaurav Saraf of Epiphany Ventures. On the same lines, Vinay quickly pinpoints, "Anyone who would sell the car has to produce the certifications, in case of the absence of the certification, we send our own engineers to do a thorough check on the vehicle."
