How Let’s Service took a Rs 35 lakh investment to Rs 7 Cr revenue and is racing towards growth
Sachin Shenoy got the idea of starting Let’s Service when he was working on his first startup, Flit.in. His work involved long bike commutes, and he didn't pay much attention to servicing his bike. One day, his bike broke down and he ended up spending a lot of money to get it fixed. That led to his startup idea.
He started Let’s Service in 2015along with his friends Sachin Radder and Girish Gangadhar in Bengaluru with an investment of Rs 35 lakh.
It is an on-demand service platform, which helps customers get their two-wheelers serviced at authorised service centers. The platform is also into dealership software business where it sells productivity enhancement softwares to authorised dealerships.
Sachin Radder, Sachin Shenoy, and Girish Gangadhar.
In 2016, the startup raised an undisclosed angel round from two industry leaders - Dr Ajay Prabhu, COO of QuEST Global, and Deepak Vinchhi, Co-founder of Julia Computing Inc. It also raised a pre-Series A round in early 2018 from Aequs Group, led by its Founder and Chairman, Aravind Melligeri.
Over the years, Let’s Service has survived by focusing on improving dealer service margins and tapping the two-wheeler servicing niche. It has, since then, scaled its business and survived what unauthorised mechanics/aggregators could not do.
Since inception, the company claims to have crossed more than $1 million in revenue.
Building a robust team
Sachin S says, “Most of the two-wheeler owners skip periodic maintenance due to the hassle of visiting an authorised service centre every three months. Our first use case was to provide a tech-enabled, on-demand doorstep pickup and drop service."
But that’s when he realised he had to work with people from the automotive industry to get the processes right.
“I met Sachin Radder and Girish Gangadhar who come with very relevant experience in this domain,” he says.
Sachin S had known Sachin R and Girish personally for a few years. Sachin R was a common friend through his elder brother while Girish and he worked together at IBM. Sachin R is a mechanical engineer by education and an auto enthusiast,while Girish worked in the auto sector with stints at Toyota and ALD Automotive.
The company's team size is 50.
The market and competition
According to SIAM, 20 million two-wheelers were sold in FY19, with close to 100 million two-wheelers on the road in India. Every quarter, at least 25 million bikes come to service stations.
The preventive vehicle maintenance market in India has two parts. One is the authorised service network and the second is the unauthorised service networks or local garages.
On the unauthorised service network side, there are some companies which are trying out the “Oyo for Vehicle Care” model by bringing together unauthorised garages with one common branding and offering value through standardisation of quality and price. This, however, is capital intensive with high CAC.
On the authorised service network side, there are companies like Let’s Service, which becomes a bridge between the vehicle owners and the authorised service networks by providing new-age technologies, and offering convenience in the form of doorstep pickup/drop, vehicle maintenance plans, and more.
Let’s Service stands apart from its competitors GoBumpr, GoMechanic, Castrol, and Bike Point by providing convenience, time/cost savings, priority service, and effective communication between parties.
The workings and business model
A two-wheeler vehicle owner can purchase the membership plan at any of Let’s Service’s 1,200 authorised outlets, across 27 cities. One can download the app and start scheduling their periodic maintenance appointments whenever they want.
“It’s as simple as ordering food online. Let’s Service ensures the customer voice is accurately captured and transmitted to the authorised service centre through a suite of software products deployed at the above outlets, and ensure a seamless vehicle maintenance experience," says Sachin S.
The startup, which works on a B2B2C model, has two revenue streams. The first one is the Doorstep Pickup and Drop Membership Programme, which is prepaid (vehicle owners pay for the membership).
The second is their Dealership Software business where it sells productivity enhancement softwares to authorised dealerships to streamline and digitise their CRM, sales, and service workflows. This software as a service (SaaS) model is subscription-based, and a dealership pays per user per month.
The startup says it works on a model that is lean, capital efficient, and highly scalable, with very low to zero customer acquisition cost.
The Let's Service team is gearing up for the next phase of growth.
Challenges and winning clients
In the beginning, Let's Service had a difficult time in finding investors.
“We had our share of skepticism from people across the spectrum, but we are moving forward undeterred. From an execution perspective, a new concept always has a customer learning curve and we have been successful in creating a large customer base. The rest are usual operational challenges, which every business goes through, and we have a solid team that has taken every challenge head-on and gotten us to where we are today," Sachin S says.
Recalling how they got their first client, he says: “We went about distributing pamphlets and also stuck some tags with our branding on two-wheelers in HSR Layout in Bengaluru. That very evening, we received a call from our first customer.”
The next big win was when the startup signed its first big partnership with a vehicle manufacturer. It took more than 1.5 years of hard work, perseverance, and patience, and their first big OEM customer is one of their clients even today.
Over the past few months, Let’s Service has partnered with multiple vehicle manufacturers who own 75 percent of the two-wheeler market share in India.
Now,Let’s Service plans to grow these contracts with razor-sharp focus and triple the business over the next 18 months.
Dr Ajay Prabhu, COO, QuEST Global, and an angel investor in Let’s Service Automotive, says, “India has been one of the largest two-wheeler markets in the world and it is ripe for disruption in the emerging digital-driven experience economy. Customers demand far better experience whether it is during buying, maintenance, repairs, or resales."
"OEMs and dealerships have to adopt superior technology solutions to delight and retain their customers. LetsService is uniquely positioned to enable such a transformation by partnering with them."
Let's Service has a blue print to scale to $10 million in three years. It is also looking for a strategic investor.
(Edited by Megha Reddy)