Gurugram-based vehicle service and repair startup GoMechanic has raised ₹105 crore in a Series-B funding led by Chiratae Ventures and Sequoia Capital with Orios Venture Partners also participating in the fundraise.
GoMechanic’s current investors include Sequoia Capital, Orios Ventures Partners, Snapdeal founders Kunal Bahl and Rohit Bansal, and angel investor Dhianu Das. It had raised ₹35 crore in a Series-A round led by Sequoia Capital and Orios Venture Partners in January this year.
GoMechanic, which is present through 215 workshops in nine cities, plans to use the funds to scale up its operations and expand to about 30 cities in 2020. By December 2021, GoMechanic aims to scale up its pan-India workshop network to 1,000.
The three-year-old startup is working to equip the independently-owned garages that comprise the unorganized car repair and servicing industry with the necessary technology, spare parts, and skill sets to remain profitable as the automotive industry embraces advanced standards.
As cars continue to become increasingly sophisticated on evolving customer requirements, industry veterans fear for the survival of the local service garages and roadside mechanics that are part of the unorganized aftermarket.
The founders at GoMechanic, Amit Bhasin and Kushal Karwa, view this part of the aftermarket as an opportunity worth $10 billion.
“The car repair market is oversupplied, as there are more than 300,000 multi-brand garages across the country already. Because of this, you do not see a high utilization rate across garages on an average,” Bhasin said in a phone interview.
Instead of setting up its own network of repair workshops from scratch, the founders, both IIM-A alumni, preferred working with the existing local garages, thereby enabling them with necessary technology and equipment and access to spare parts, and also training mechanics with superior skill sets to not only help them survive but also offer car owners more affordable services.
The startup claims that car owners can avail repair services at rates that are about 40% less than those of general workshops in the organized market.
“The decision to use the existing infrastructure only and upgrade the same, rather than setting up our own ground up, helped us with speed-to-market and with the fundamental understanding of the domain,” Bhasin said.
This is a big opportunity to use the existing assets and capacity of local garages and ensure a higher utilization rate so that it could be a win-win for all in the ecosystem, said Karwa.
This article was first published on livemint.com