Elevar was the early investor in Bike Bazaar and continues to hold the largest stake in the business.
The company intends to use the funds to increase its business in rural India and also scale its marketplace business for the sale and purchase of used two-wheelers.
Founded in 2017 by former executive Srinivas Kantheti and former executive Karunakaran Vadakkepat as a used two-wheeler financing business, Bike Bazaar has now several businesses within the two-wheeler segment including new two-wheeler financing, a marketplace for pre-owned two-wheelers, and a new electric vehicle financing business besides additional services like insurance. It will add servicing as well, officials said.
The founders have spent decades in automotive and its associated financing space before starting up.
“Our strategy is to be present across the whole lifecycle of the two-wheeler,” Vadakkepat said. “For example, someone who is looking to buy a two-wheeler may want to exchange his old two-wheeler. He can avail of both the financing services and the resale service from us. We should be able to sell that old vehicle through our marketplace, or different pre-owned sales channels. We want to add value-added services like RTO transfers, insurance, etc, and over time we want to add services also. Actually, we want every business to feed on the other business so that we can leverage costs.”
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He said the company is in talks to raise another Rs 80 crore and is also in advanced stages of talks with a global investor to raise a Rs 200-250 crore funding round specifically for its EV business.
ET had reported on August 19 that mainstream venture capital investors are turning to the EV startup space even as funding has slowed down in the larger startup ecosystem.
Vadakkepat said the company is still figuring out how to structure the company to accommodate the funding specifically for the EV business.
Bike Bazaar claims to have a significant presence in smaller towns and operates in more than 140 cities across India with over 1,000 touchpoints. Its financing business has disbursed more than 3,00,000 two-wheeler loans till date and as of July 2022 it had done business with a cumulative gross transaction value of more than Rs 1,500 crore. Since its inception, the company has raised a total of Rs 400 crore in equity funding.
Vadakkepat told ET that the company’s customer base includes people who are in professions like plumbing, carpentry, and household work, and these people lack the requisite financial literacy to avail of credit and other facilities. Bike Bazaar has set up multiple cash collection points to ensure repayment of the loans.
Bike Bazaar partners with multiple banks and NBFCs through which it issues loans. The startup typically will have 20% exposure to these loans, Vadakkepat said.
“Women’s World Banking is dedicated to women’s economic empowerment and WAM is investing in Bike Bazaar’s demonstrated potential to provide accessible and affordable two-wheeler finance to financially underserved women in India, simultaneously enabling their mobility and developing their asset bases and credit profiles,” said Christina Juhasz, chief investment officer of Women’s World Banking Asset Management.
WAM is funded by the German government’s Federal Ministry of Economic Cooperation and Development and The European Union.
