[Startup Bharat] This automotive B2B ecommerce platform is making car maintenance affordable and easy
For most car owners, one of the biggest worries is the service and maintenance of the car at the right price and to avail of quality spare parts on time.
Helping car repairers in the nook and corner of the country is SparesHub. The Pune-based startup is an ecommerce platform for automobile parts catering to B2B customers. The company claims to offer genuine spare parts online and assures same-day delivery to service centres, workshops, and fleet owners in Pune, Bengaluru, and Mumbai.
Run by Iradium Automobiles Private Limited, SparesHub was started in 2013 by Tapas Gupta and Arijit Chakraborty. The duo met while doing their MBA at Nirma University, Ahmedabad.
“The car maintenance industry in India has multiple problems like unavailability of parts and over-expensive parts; non-standard price of services; lack of a seamless digital customer experience. Car owners are regularly cheated in either the price of the car repairs or the quality of repairs. SparesHub is working to remove these inefficiencies by using technology solutions,” Tapas Gupta, Co-founder and CEO, SparesHub, tells YourStory Media.
Tapas says SparesHub provides genuine car parts to workshops at 20 percent lower prices than competing retail stores because it buys these parts directly from the manufacturers. As of now, SparesHub has a registered customer base of about 450 customers across Pune, Mumbai, and Bengaluru.
SparesHub was started in 2013 as a B2C platform. Tapas recalls the time he was working at CRISIL. During this time, his family members were struggling to avail spare parts for their car.
“Garages and car workshops had limited sources of buying car parts and the car owner faced delays and paid high prices for car parts,” he says. He points out that this was also the time when ecommerce players like Flipkart and Snapdeal were getting popular, but none of them sold car parts online.
Tapas started toying with the idea of starting an ecommerce website only for car parts that would deliver pan-India. He studied the market size and its scope in India and was convinced that this was a large opportunity to tap using ecommerce.
Tapas launched SparesHub in 2013, and he got his first customer within four days of launching the website. Soon, he connected with his batchmate and friend Arijit Chakraborty, and given their shared interest in the automobile industry, Arijit joined the company as a Co-founder. Before starting SparesHub, Tapas worked with companies like Mercedes Benz and CRISIL. Arijit previously worked with Tata Motors and Dell International.
In 2015, the company pivoted from B2C to B2B because car workshops started buying car parts daily from the company.
“SparesHub is solving the problem of supply chain inefficiency in the auto industry using technology. SparesHub provides car parts to car service centres at affordable prices and offers delivery within three-hours of placing orders,” says Tapas.
SparesHub competes with traditional retails stores and other startups that sell car parts to workshops, but the startup claims that its competitive pricing, tech-first approach, and service make it stand out among others.
India is the fifth largest car market after the US, China, Japan, and Germany, with more than 2.7 million passenger vehicles (cars) alone in FY20, according to the Society of Indian Automobile Manufacturers (SIAM).
According to the founders, automobile spare parts is a Rs 40,000 crore industry in India with almost 80 percent of the cars present in the top-20 cities.
SparesHub charges a commission for every transaction on its platform. “We perfected the business model in Pune and later replicated the same model in Mumbai and Bengaluru,” says Tapas.
Besides this, the startup also launched its private label of car parts called Frohlich Parts in 2019, with which the company plans to leverage its existing expertise in automobile parts sourcing and share its proprietary parts catalog to help new entrepreneurs and businessmen setup SparesHub Car Parts Stores using the franchise model.
With about 450 registered B2B customers in the three cities and 67 team members, Tapas says the company has a current annual revenue run-rate of Rs 8 crore and is cash-flow positive.
“We are on the path to achieving EBITDA profitability by April 2021,” adds Tapas.
Funding and plans
The founders started with a seed capital of Rs 17 lakh from their savings and with the help of the family. Besides this, SparesHub has raised a total of Rs 10 crore of angel investment from Indian Angel Network, Hyderabad Angels, Chennai Angels, and other HNIs across two rounds of investment in 2015 and 2019.
This year, the startup is looking to raise Series-A investment of Rs 35 crore for its next phase of business expansion and growth.
Tapas says the automobile industry is seeing trends such as car telematics data for predictive maintenance, the emergence of electric vehicles, preference of car companies to sell direct-to-consumers, and so on, and SparesHub will ride on these long-term trends and will expand geographically and also become vertically integrated for better value creation in next 12-18 months.
“SparesHub is working to build the next level of customer experience for car owners using a digital-first approach, leveraging data, and constantly raising the bar of its solutions,” says Tapas.