OTO Capital, a retail automotive leasing startup, based out of Mumbai, has secured INR 10 crore from Prime Venture Partners.
The startup would use the funds to create further awareness around the brand, strengthen its technology platform, and scale presence to 10 cities (metro and non-metro) in India by June 2020.
Sanjay 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 consumers need flexibility and medium-term options rather than just short-term rentals or permanent choices. Sumit and Harsh are amazingly passionate entrepreneurs and we have been very impressed by the progress made by the team over the past year.”
OTO Capital was founded by Sumit Chhazed and Harsh Saruparia in 2018. It is a credit financing options for individuals buying cars through. The startup aims to provide the fastest and the most affordable way for modern Indian consumers to buy a car.
It enables an individual to take a loan for a specific time period (three to five years). The individual can change the car after paying the interest for that period. Unlike a bank loan, OTO Capital’s model means that the car is no longer an asset owned by the individual.
It is almost like a long-term lease contract.
Furthermore, OTO partners with banks and NBFCs to provide capital for car buyers at showrooms, which enables the startup to offer alternative options for financing automotive purchases.
At present, OTO has a presence in Mumbai and Bengaluru, with close to 150 dealers offering their financing solution.
By the end of 2019, the startup is also looking to set up another office in Bengaluru to house its technology and marketing functions.
Sumit Chhazed said, “Considering our background, we have a strong understanding of the second-hand auto buying market. Using data, we capture trend lines, and have an idea of the buyback value for every car and model in the market. We will make sure it is safe to commit up to 40 percent of the car’s original price for the second-hand sale. And this discount is provided to customers taking loans on our platform, right at the start, reducing the pricing even more.”