Formula 1 racer Narain Karthikeyan is driving success with his used two-wheeler startup
Coimbatore-based DriveX, founded by Narain Karthikeyan, India’s first Formula 1 racing driver, and his friend Christopher Anand Sargunam, refurbishes used two-wheelers and gives customers a new vehicle buying experience.
India is the largest manufacturer of two-wheelers in the world. According to industry body SIAM, over 20 million two-wheelers are transacted annually in India. While the market has attained speedy growth, the demand for used two-wheelers has also seen a constant rise over the past few years. However, there are very few organised players in the market for pre-owned two-wheelers.
Seizing this market opportunity, Narain Karthikeyan, India’s first Formula 1 racing driver, started along with his childhood friend Christopher Anand Sargunam, in 2020. The Coimbatore-based startup aims to provide affordable mobility solutions to people.
“At a meeting during the COVID-19 lockdown, we conceived the idea of DriveX when Karthikeyan highlighted the need for affordable mobility in India and how technology could bridge the gap,” recalls Christopher, Co-founder, CTO, and COO, DriveX. Christopher is a veteran in managing digital and tech projects and has worked at tech and financial institutions such as Lehman Brothers, Nomura, and the Royal Bank of Scotland.
Refurbishing two-wheelers
DriveX started as a digital platform that provides two-wheelers to customers on a subscription model and allows them to buy two-wheelers at reasonable prices. It also offers the flexibility of no down-payment and an all-inclusive monthly subscription fee that covers access to the vehicle, maintenance, insurance, and the replacement of tyres and batteries.
In 2021, the startup evolved into a model whereby it refurbishes used two-wheelers and sells them to customers. All the features that a customer gets while buying a new vehicle such as warranty, finance, after-sales service, reliability, and documents are included with the refurbished vehicle.
“Although the subscription model was successful in the metros, we realised that consumers, particularly those from Tier II and below cities, favoured the conventional form of ownership,” says Karthikeyan.
“While working with hundreds of customers along the way, we at DriveX became aware of some of the difficulties experienced by buyers of pre-owned vehicles--non-availability of finance, a market dominated by unregistered local financiers, difficulty in finding high-quality vehicles, and lack of flexibility regarding switching to a different vehicle or using a vehicle for a shorter term,” he adds.
To fill this gap, DriveX identified few key points that could set it apart in the mobility space and developed a business model around sourcing, refurbishment, finance assistance, and technology.
It sources products through traditional modes as well as from retail customers, OEMs, and vehicle dealers. It has also developed state-of-the-art refurbishment facilities called DriveX Technical Centres to cater to periodic/unscheduled maintenance of the vehicles. These vehicles are evaluated using a 120-point checklist and then certified fit for sale. Customers are also provided with a warranty post-sale.
DriveX has established a financial assistance model where it will facilitate refinance for vehicles with instant loan approval, lower rate of interest, and down payment through mainstream NBFCs and banks. The startup also uses proprietary technology for inspecting vehicles, managing the technical centres, tracking the vehicle location, and operating the platform to list the vehicle along with finance options.
According to the founders, working in the unorganised used two-wheeler market has been their main challenge.
“While unorganised fragmented dealers across the country are focused on maximising sourcing and margins, we at DriveX aim to create a strategic and transparent ecosystem for renewed two-wheelers, which are sustainable and keep the brand position intact for the manufacturer,” says Karthikeyan.
“Our work involves collaboration with all stakeholders such as OEMs (original equipment manufacturers), banks, NBFCs (non-banking financial companies), insurance companies, and service providers,” he adds.
Some of the other players providing similar service in the country include BeepKart, CredR, etc.
Funding and growth
DriveX was initially bootstrapped with support from friends and family. Post the closing of FY 2021–22, the startup set out to the market for its Series A funding round.
In August 2022, the company raised funding of Rs 85.41 crore from TVS Motor Company, wherein a 48.27% stake was acquired in NMMSPL (Nkars Mobility Millennial Solutions Private Limited) through primary and secondary investments.
Within 12 months of its launch, the startup was able to establish two refurbishing centres and four fulfilment centres, growing 40% M-o-M. The revenue of the company grew ~17x in FY 21–22 against the previous year.
DriveX is on track to clock retail transactions of over 7,000 vehicles a year and to build a network of 50 outlets across most Tier I and Tier II cities in the country and five refurbishing centres.
Its revenue for FY 21 stood at Rs 45-50 lakh, while it clocked about Rs 8 crore in FY22.
The company’s main source of revenue is through the sales and service of pre-owned two-wheelers. DriveX also has a franchise model in addition to company-owned, company-operated (COCO) DTCs (DriveX Technical Centres) and showrooms.
In February 2023, it launched DriveX Technical Centre in Coimbatore, with similar centres to be launched in Hosur and Chennai soon.
The Coimbatore Technical Centre holds a capacity to refurbish 350 to 400 two-wheelers a month and will equip multi-brand two-wheelers with the latest ELGI machinery that has been made to DriveX’s standards and specifications.
Plans ahead
Eventually, DriveX intends to set up technical centres all over India. It aims to log retail sales of over 6,000 vehicles a year and establish 50 outlets and five refurb centres across Tier I and Tier II cities. DriveX has also expanded to reach out to potential franchisees across the country.
The company is currently hiring technical personnel such as technicians, tinkerers, and painters to form an entire ecosystem for scaling up 10X in the near future. It has also been collaborating with training colleges to provide jobs to ITI graduates.
Edited by Megha Reddy