Venture Partners, a seed stage fund, led by serial entrepreneurs—Amit
Somani, Shripati Acharya and Sanjay Swamy, has invested Rs 10
Crore in OTO, India’s first retail automotive leasing company.
With OTO, new car buyers now have an affordable option
of leasing a car for a fraction of the cost at an EMI that is 30
per cent lower than the existing car loans. Buyers also have
the flexible option of buying the car at the end of the 3-5 year
company will be expanding to 10 cities in India in the next 6 months
and increase its partnerships with automotive dealers, banks and NBFCs. The comapny has 150 dealers in Mumbai and Bengaluru. It has already
leased cars worth more than Rs 10 Crore in the last six
months and will be leasing out more than 40 cars per month and
plans to grow 10 times by early 2020.
Swamy, Managing Partner, Prime Venture Partners, said, “Car leasing is a huge
gap in the Indian auto industry. OTO is ushering in a new, long-term
growth-lever for the automotive sector. Several car buyers need flexibility and
medium-term options rather than just short-term rentals or permanent choices.
We are excited about the huge demand for this service and are delighted to
partner with the company to build a solid franchise.”
company partners with banks and NBFCs to provide the capital and
offers customers with an alternative option for financing automotive purchases.
The company provides a full auto-lifecycle management, from credit underwriting
to insurance, maintenance and eventual resale of the vehicle.
Sumit Chhazed, Co founder, OTO, said, “We see a huge opportunity
in providing auto buyers with an alternate finance option in a sector which has
hardly seen any innovation in the past. The initial customer traction we have
achieved in a short time reinforces our belief in this space and we are on a
mission to make vehicle ownership more affordable, hassle-free and quicker.
Prime is the leading fintech investor in the country and we’re delighted to be
working with them to bring an exciting new option for the Indian car buyer, and
play a role in kick-starting the revival of the auto industry.”
India has seen a significant drop in car ownership, notably among
the younger generation. The frequency with which new car models are being
introduced and the rise in usage of connected cars is rapidly changing the
vehicle ownership experience. The upwardly mobile younger generation of Indian
customers are keen to get to their dream car earlier, without being stuck with
it forever. The first-car buyer age has come down significantly and customers
are now seeking faster access to vehicles, low-cost EMIs and quicker upgrades.
with dealers, corporates and automakers, OTO has become the fastest-growing
alternate option to car loans. The company has already signed up 15
corporates where employees enjoy hassle-free financing along with flexible
ownership and additional tax savings.
year in India, more than 6.25 mn are sold out of which more than 60 per
cent are cars are financed. Car leasing is a popular method of owning
cars in mature markets such as the US where more than 30 per cent of
all cars sold are leased. India is expected to see a similar turnaround where
customers value access over ownership and car leasing becomes a more viable and
preferred alternative, especially among the young buyers. One of the
significant causes for the recent slowdown of the automotive industry is
believed to be caused by challenges in financing vehicle buys. While the
government is taking measures to boost demand, alternative finance options such
as OTO Capital could bring buyer interest back on track by making it easier for
customers to finance automotive purchases.