Mumbai-based vehicle financing company AutoMony has raised $3 Mn in Series A funding. The investment has come in from Asha Impact, Sundaram Finance and other HNIs.
AutoMony cofounder and MD Rishab Bafna said the funds will be used to expand in new geographies and strengthen its technology platform. Founded in 2018 by Bafna and Shirish Godbole, AutoMony is primarily engaged in used and new vehicle financing including commercial vehicles, multi-utility vehicles and passenger vehicles.
The company aims to increase its assets under management from INR 70 Cr to over INR 500 Cr in the next two years. Among its key targets this year is fulfiling the entrepreneurial ambitions of first-time truck owners and small fleet operators by financing the purchase of used and new commercial vehicles or passenger vehicles. AutoMony claims to have disbursed over 1500 loans across its 15 branches in Maharashtra and Gujarat.
“Given Automony’s deep dealership networks and scalable tech-enabled model, we believe Automony is well placed to provide first-time financing to small operators and drivers with inadequate credit histories,” said Vikram Gandhi, cofounder at Asha Impact.
According to an IBEF report, the Indian auto industry, one of the largest in the world, accounts for 7.1% of the country’s GDP. As per DataLabs by Inc42 estimates, the credit demand in India is expected to rise at a rate of 3.73% between FY17 and FY22, to reach $ 1.41 Tn.
The setting up on digital lending platforms have risen up to become an alternative to the conservative banking system that heavily relies on the creditworthiness of an individual.
In the auto-financing space, the Indian market has plenty of online marketplaces already trying to enable financing for cars and bikes. For instance, in July 2019, Gurugram-based online used car marketplace Cars24 procured an NBFC license and will be venturing into the consumer lending business. The company has formed a new entity — CARS24 Financial Services — for the same.
In November 2019, Droom acquired Xeraphin Finvest in an all-cash deal to strengthen its credit and auto loans business. The Droom Credit marketplace has tied up with lending partners such as IDFC First Bank, Yes Bank, Tata Capital, Manappuram Finance, Faircent, Hero Fincorp, Cashkumar, and Lendbox for providing loans to its customers.