Indian online auto parts start-up raises new funding
Pune-based SparesHub.com raises Rs 2 crore from Singapore-based Anthill Scale Ventures, US-based Esvee Technologies, Chennai Angels and some HNIs.
Online autoparts marketplace SparesHub.com has raised Rs 2 crore from Singapore-based Anthill Scale Ventures, US-based Esvee Technologies, Chennai Angels and other high net-worth individuals (HNIs).
Iradium Automobiles, that owns and manages SparesHub.com, announced that it raised investment of Rs 2 crore. The Pune-based start-up caters to car owners across India functioning as an online market for automobile parts and supplying them directly to buyers. This is the second round of funding the start-up has raised, following the first in October 2015.
SparesHub.com says there are over 23 million cars in India and the automobile parts replacement market is estimated to be worth $8 billion and growing at an estimated 12-14 percent year on year.
The traditional car parts industry is evolving fast with many car makers opening and promoting the open sale of car parts to multi-brand workshops and car owners. SparesHub.com works directly with car companies to make available genuine parts across the country through their e-commerce model. The company deals in an extensive range of parts for the braking, clutch and suspension systems for cars along with regular service parts.
Increasing scale of operations
As per SparesHub, the investment funds would be used to grow its current customer base while foraying into new geographical areas of operations and also strengthen its technology platform. The company currently has over 170 registered workshops, which buy parts regularly, on its platform.
“We are convinced about the traction Spareshub has created in the traditional automobile spares market, its unique business model of zero inventory, B2B2C and providing visibility on aftermarket parts replacement has reinforced our decision to do this second round of funding that will speed scale them towards series A,” said Prasad Vanga, partner at Anthill Scale Ventures, Singapore.
“Creating an online platform showcasing spares from leading automobile manufacturers, Spareshub is also enhancing the reach of genuine spares to the underserved, remote parts of the country. Given the fast-growing automobile industry and aftermarket, it is uniquely positioned to tap the consequent emerging opportunities in the sector,” said Mahalingam, one of the investors from The Chennai Angels.
At ACMA Automechanika 2017 earlier this year, ACMA president Rattan Kapur had commented on the opportunities in the online marketplace, “Today’s generation is happy to go along with digitisation. Aftermarket channels will shift from the traditional brick-and-mortar template.” He said that in 2014, online sales totalling $20 million accounted for less than 1 percent of the aftermarket. But now the B2C market is slated to grow at a CAGR of 7 percent to $150 million by the year 2020.
At the same event, Tanmay Shah, category leader – Automotive, Amazon, had earlier spoken about the huge opportunity that digital aftermarket presents particularly in a country like India. Citing the company’s reach in India, he said deliveries can be made to 19,000 pincodes in the country, pointing out how strong the postal system is in India. As regards speed of delivery, he said about 2 million deliveries can be made the very next day.
Citing figures, he showcased the rapid pace of online marketing in India. In 2015, Amazon was selling 22,000 automotive products from 6,000 sellers. At present, it has a million products and over 6,000 sellers. He revealed that in the ‘Amazon Great Indian Sale’ held between January 20-22, 2017, the company sold “50,000 automotive products each day” and that many of the orders placed were from small garages from different parts of the country. Shah said product availability and genuineness are vital for success.
With the country driving hard towards digitilisation, market forces along with the government will accelerate the growth of online retailing both for automobiles and spare parts. Thus, consumers can look forward to gain just more than plain vanilla discounts.
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