[Funding alert] Automotive financing startup OTO Capital raises $6M in Series A round led by Matrix Partners India
, a two-wheeler buying and financing startup, has raised Series A funding of $6 million in a round led by Matrix Partners India.
The round also included participation from existing and new investors such as Prime Venture Partners, 9Unicorns, Better Capital, and marquee angel investors like Asish Mohapatra of OfBusiness, Ramakant Sharma of Livspace, Kunal Shah, K Ganesh, and Ashneer & Suhail of BharatPe.
OTO said it will use the funding to scale its user base and to become the default app for two-wheeler buying and financing for 20 million Indians who purchase two-wheelers every year.
OTO is currently present in five cities - Chennai, Bengaluru, Pune, Hyderabad, and Mysore. With this investment, the startup plans to launch its financing-cum-commerce platform in 15 new cities including, Delhi, Nashik, Indore, and Vijayawada.
To drive this growth, OTO will double its team size by March 2022 and plans to hire aggressively across verticals, especially technology, product, marketing, and operations.
Sumit Chhazed, Co-founder, OTO Capital, said,
“We are re-imagining the two-wheeler buying and ownership experience for millions of Indians. Customers can research, schedule test drives at home, avail innovative & flexible financing options, and complete the purchase journey via our OTO platform. With electric two-wheelers added to the mix, OTO aims to become the default app for Indian buyers to cut through the noise and get a two-wheeler buying experience that has never existed before”.
Started in 2018, the startup operates on a simple financing model for two-wheelers where the buyer pays an upfront amount like any other loan but gets up to 30 percent lower EMIs with an option to retain, return or upgrade at the end of the tenure. The platform works in partnership with various banks and NBFCs to provide financing options to its customers. It also provides full auto lifecycle management, from credit underwriting to insurance, maintenance, and eventual resale of the vehicle.
OTO has partnerships with all major brands such as Hero Motocorp, Honda, Suzuki, Hero Electric, and more through their dealerships.
Vikram Vaidyanathan, Managing Director, Matrix India, said, “In the world’s largest two-wheeler market (India), the consumer’s preference is changing – buying online, stretching their budget for quality and upgrading faster. OTO caters to this new consumer with a new model of buying, financing, and ownership."
"We’re believers in the Financing + Commerce model and excited about the journey ahead for OTO. We’re privileged to back Sumit in this company and look forward to forging a great partnership with the team and outstanding investor group.”
In a statement, OTO said that despite the Covid-19 pandemic, the startup has grown 4X in the last 12 months while maintaining less than one percent NPAs. More than 30 percent of the company’s transactions were sourced and completed digitally, it added.