OTO Capital plans to use the funds to grow its user base and establish itself as the go-to app for purchasing and funding two-wheelers in India, where 20 million people buy two-wheelers each year.
Listen to the audio
OTO Capital Series A funding
In a round-headed by Matrix Partners India, OTO Capital, a two-wheeler purchasing and lending firm, raised $6 million in Series A funding.
Existing and new investors such as Prime Venture Partners, 9Unicorns, Better Capital, and prominent angel investors such as Asish Mohapatra of OfBusiness, Ramakant Sharma of Livspace, Kunal Shah, K Ganesh, and Ashneer & Suhail of BharatPe participated in the round.
OTO plans to utilize the funds to grow its user base and establish itself as the go-to app for purchasing and financing two-wheelers in India, where 20 million people buy two-wheelers each year.
Chennai, Bengaluru, Pune, Hyderabad, and Mysore are the five cities where OTO is actively active.
The business hopes to use the funds to expand its investment platform to 15 more locations, including Delhi, Nashik, Indore, and Vijayawada.
To support this expansion, OTO wants to double its staff size by March 2022 and actively hire across all verticals, including technology, product, marketing, and operations.
“We are re-imagining the two-wheeler purchasing and ownership experience for millions of Indians,” said Sumit Chhazed, co-founder of OTO Capital. Buyers may use our OTO platform to conduct research, organize test drives at their homes, obtain creative and flexible financing solutions, and complete the purchase process. With the addition of electric two-wheelers to the mix, OTO aspires to become the go-to app for Indian purchasers looking to cut through the clutter and receive a two-wheeler shopping experience like no other”.
The business, which began operations in 2018, uses a simple financing strategy for two-wheelers in which the buyer pays an upfront fee similar to any other loan but receives up to 30% cheaper EMIs with the choice to keep, return, or upgrade at the end of the term. To provide financing alternatives to its clients, the platform collaborates with several banks and NBFCs. It also handles the whole auto lifecycle, from credit underwriting through insurance, service, and final vehicle sales.
Through its dealerships, OTO has agreements with all major manufacturers, including Hero Motocorp, Honda, Suzuki, Hero Electric, and others.
“In the world’s largest two-wheeler market (India), the consumer’s desire is shifting – buying online, extending their spending for quality, and updating faster,” said Vikram Vaidyanathan, Managing Director, Matrix India. With a new paradigm of buying, financing, and ownership, OTO caters to this new customer.”
“We believe in the Funding plus Commerce concept and are looking forward to OTO’s future. We’re thrilled to be investing with Sumit in this firm, and we’re looking forward to building a strong relationship with the team and the exceptional investor group.”
OTO said in a statement that during the Covid-19 pandemic, the company has expanded 4X in the last year while retaining fewer than 1% NPAs. It was also revealed that more than 30% of the company’s transactions were obtained and executed online.