Goa vacation inspires chartered accountant to get ONN the road to entrepreneurship
Online platform ONN Bikes aims to simplify rentals, be it for everyday commutes, road trips, tour packages, or for bike taxi, food delivery, and logistics companies. It also offers riding gear, bike merchandise, and maintenance.
At a glance
Startup: ONN Bikes
Founders: Namit Jain and Shanky Munoth
Year it was founded: 2016
Where it is based: Bengaluru
Sector: Transport/Bike rental and leasing
Problem it solves: Daily commute and last-mile connectivity
Funding raised: Pre-Series A led by Z Nation Labs, Venture Catalysts, and JITO Angel Network.
Multiple thoughts run through our minds when we are on vacation. Many of us dream up startup plans as well. Namit Jain, 26, is just like us. Except, he actually took the startup from his dreams and turned it into a reality.
A leisure trip to Goa and then Manali laid the foundation for ONN Bikes.
“I was inspired by the unorganised bike rental market in these locations to create an organised business that can be accessible from any location in the country through an app,” Namit says.
Namit realised that the Indian transport market had a huge gap when it came to affordable, reliable, and hassle-free modes of commute, both intracity, and inter-city. Inspired by how bike rentals were a huge hit in Manali and Goa, he decided to replicate the idea in other metro cities.
“Public transport in India is overburdened and the on-demand cab market is not affordable to majority of the Indian population. There is a huge gap and this led us to create an alternate mode of two-wheeler commute in India across tourist destinations and metro cities,” Namit says.
What’s ONN Bikes?
ONN Bikes is a web-based and app-based self-drive motorcycle rental platform. It also offers other services like two-wheeler leasing, maintenance, and adventure touring.
Its B2B market segment caters to bike taxi companies, food delivery companies, logistics companies, and QSR Chains, among others. The startup is currently operational in Bengaluru, Hyderabad, Jaipur, Mysore, Udaipur, and Delhi-NCR.
The business model
ONN Bikes has a two-sided business model.
On the B2C side, the user can visit the website/app and rent the vehicles. The app detects the user location and shows the nearest ONN Bikes hub stations around the user. One can choose the date and time of renting the bike, after which one gets a list of available bikes available at each location for the specified dates.
Upon verification, the vehicle is handed over to the rider.
“We also provide doorstep delivery of the vehicle, which is a chargeable service as of now. We have plans to make it free in the coming months,” Namit says.
Every bike has a camouflaged GPS system, which monitors the real-time location of the vehicle. It has security features with the latest technology, so as to guarantee the safety of the vehicle.
Namit adds, “We are very serious about customer safety and provide every customer with two ISI-marked helmets free of cost for the duration of the trip. We also provide riding gear for customers opting for long rides. This ensures extra safety for the riders.”
Any company which relies on two-wheelers for last-mile delivery or companies with ground sales team can use Onn Bikes vehicles. It has direct tie-ups with companies, and provides vehicles on a lease rental basis with a lock-in of 12 months to 24 months.
“This helps the companies in multiple ways like no capital cost required for purchase of vehicles, no hassle for maintenance of the vehicles, any time scalability as bikes are readily available with us, low monthly rentals, brand new fleet for better user experience, on-call assistance in case of breakdowns, and fuel monitoring systems for better efficiency among other features,” Namit explains.
Talking about the challenges, Namit says, “The challenge was to build the necessary awareness among the B2B and B2C audience about our rental and leasing services. Tier II and III cities are a huge market for us and building mass awareness for an emerging concept like bike rental was a major challenge.”
However, ONN Bikes, which has 65 employees as of now, has been successful in building brand credibility through its strong alliances and partnerships with giants like Uber and Ola, restaurants, hotels, cafes, and hostels, etc.
“We consciously concentrated on segmented and targeted marketing rather than going overboard with mass marketing,” Namit says.
The revenue model
ONN Bikes sources vehicles under a leasing arrangement through crowdfunding. And, it, in turn, leases the vehicles to end consumer (B2C)/ delivery companies, bike taxi companies, QSR chains etc (B2B).
It manages the technology, marketing, security and maintenance, along with the legal permits and licenses required to run the business. It pays a fixed return to the investor at the rate of 18-20 percent IRR.
ONN Bikes has received three rounds of funding till date. It received an angel round from Z Nation Labs of $1lakh, followed by an undisclosed amount as seed by Grace Venture Capital. In December 2017, It received a total of Rs 4.5 crore in pre-Series A funding led by Z Nation Labs, Venture Catalysts, and JITO Angel Network.
With presence across five states, ONN Bikes has over 2,200 two-wheelers as of now. It claims to have grown at the rate of 25 percent month-on-month.
“We have seen traction of over 90,000 rides and a user base of over 75,000 customers,” Namit says.
The big difference
With India being the world’s biggest market for two-wheelers, many big and small bike rental players like RentOnGo, Wheelstreet, Wicked Ride, Royal Brothers, Rent Set Go, Roadpanda, Tazzobikes, and Vogo are already operating in the space.
Talking about the ONN differentiator, Namit says, “We have complete control over inventory and our B2B growth is sustainable and risk-free.” He also claims to have a strong focus on unit economics and profitability from year one.
For the future, ONN Bikes has plans to foray into all the 84 tourist destinations listed under Incredible India in the next five years. It is also aiming to expand to all major metro cities as well.
Namit says, “We will soon be launching our services in Kerala, Gujarat, Himachal Pradesh, and Tamil Nadu. We have already started to work on a test model for launching electric two-wheelers in our existing cities. As part of a greener future, we will push this segment aggressively in the coming years.”
ONN Bikes has also come up with a franchise-based business model to open up new stations in new cities.
“This way we can scale up quickly without losing control on service and quality of the vehicles. In continuation of our endeavour for a greener future, ride sharing will be introduced and encouraged once we establish operations,” Namit sign off.