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‘Plan To Raise Generous Funds & Expand To 15 Cities By Next Year’ Sumit Chhazed, Co-founder, OTO Capital

We aim to expand to 15 cities by next year, evolve our commerce cum finance platform and enable 100K Indians to buy & finance their dream bike with OTO

Tell us about OTO? How did it start? OTO’s growth Journey?

There are 140M 2-wheelers in India and every year another 20M 2-wheelers are sold. Over $10B in 2-wheeler financing supports this industry yet the experience for customers is still stuck in the 1980s. It is extremely broken from finding options to test driving to financing paperwork and more. Every step is disconnected from the next step and there are unnecessary delays all over.

Also, my stint at CredR gave me insight that new age customers love to upgrade faster, prefer to invest less and want to have minimum commitment towards ownership which is not possible with existing options.

Harsh & I both belong to Tier 3 city and have been owning/riding two wheelers since early age and can relate to this problem very well. Thus, we definitely believe the millions of 2-wheeler owners deserve better experience.

Harsh & I started OTO with a vision to re-imagine 2-wheeler ownership for millions of Indians. OTO aims to present a 10X simpler, faster and more convenient way for Indians to buy, finance and own their 2-wheelers.

With OTO’s 4x year-on-year growth despite the pandemic led crisis, the brand has significantly emerged as the preferred app for thousands of two-wheeler buyers. It expanded from just being in Bangalore in 2019 to 5 cities and digital acquisition has grown 8X while keeping NPAs under 1% against industry average of over 5%.

We aim to expand to 15 cities by next year, evolve our commerce cum finance platform and enable 100K Indians to buy & finance their dream bike with OTO

What are your offerings? Who is your audience?

OTO provides an all round digital experience for our customers to research, schedule test drives at home in 1-click, purchase and choose an innovative and flexible financing option among top rated 2-wheelers, all within the OTO app. Customers can now buy and get the best financing option at the comfort of home.

Our product is specifically targeted to users in the age group of 21-36 years who want a simpler, affordable and convenient option to buy, finance and own a two-wheeler.

How is OTO helping its current customers with better financing options? How does OTO simplify the process?

OTO has created a dramatically simpler leasing-like financing model for 2-wheeler purchases where buyers pay a similar upfront payment like any other loan, pay up to 35% lower EMIs and have the option to own the 2-wheeler at the tenure end by paying the remaining amount OR sell it back to OTO.

OTO has added an app-based layer to help 2-wheeler buyers to find all the top options in one place and schedule a home test drive at their convenience. After its selection, customers can apply for OTO’s Super EMI Plan digitally, get approval within 30 minutes and book the 2-wheeler from the comfort of home at the nearest store.

Impact of Covid 19 on the auto sector? How it fuelled the path for the EV segment?

Covid-19 initially had a dampening effect on the sector with IC vehicle sales down to 60% in Tier 1 cities during the first wave. But with time consumers became more cautious and preferred personal mobility options against public transport which brought an increase in demand for 2-wheelers.

Also we believe events like Covid19 push everyone to think about what the future holds and in turn people make responsible choices. This led to growth in EV adoption as it’s an environment friendly option. The maintenance for EVs is much cheaper and with increased Government subsidy (FAME 2) also led to definitie uptick in EV adoption.

Your take on the demand for EV two-wheelers? How does the future look like for EVs in India?

EV is a sunrise sector, and multiple existing or new brands are investing heavily to launch their EV two wheelers. Also, with the latest launch of Ola Electric and it’s future factory, the outlook is definitely bright. Multiple players are at present investing in building out the charging infra for EVs as well. The future looks carbon neutral and environment friendly.

Millennial and Gen Z consumer behaviour trends in two-wheeler ownership?

Most of the new-age consumers love to upgrade faster. They value access over ownership and are looking at opportunities to own with minimum commitment. Also, the new age consumers are digital savvy and prefer to enquire and make purchase decisions online.

This is opening up the market for newer ways to discover, finance and ownership for such customers. OTO’s One Stop Commerce plus Financing platform hopes to be a game-changer for the industry.

Why OTO’s Super EMI Plan is for two-wheelers and EVs only?

India is the largest 2-wheeler market in the world. Most of the millennial and Gen Z consumers start with two wheelers considering the affordability and we have also seen two-wheeler ownership trends hover at 2-4 years making it ideal for leasing like models. Once we have captured the bike market, OTO will expand to cars as well.

How did OTO infuse recent funding? Any plans for more funding?

OTO raised a 6M$ series A recently to expand its footprint across more cities, increase user base and strengthen its technology back-end. OTO is seeing interest from few growth funds and will plan to do a larger fund-raise around the end of the year.

Source: Business World

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