India’s first car leasing company OTO has received a funding of INR 10 Cr from Prime Venture Partners. The company plans to use the funding to expand in 10 cities in the next 6 months.
“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 car buyers need flexibility and medium-term options rather than just short-term rentals or permanent choices,” managing partner of Prime Venture Partners Sanjay Swamy said.
OTO, founded in 2018 by Sumit Chhazed and Harsh Saruparia, offers an affordable option of leasing out a car for a fraction of the original cost. The customers can pay through an EMI, the instalments for which will be lower than existing car loan instalments. The company also provides the riders with the option of buying the car by the end of their 3-5 year lease period.
‘On A Mission To Make Vehicle Ownership More Affordable’
OTO follows an instant-approval model that allows customers to lease a car within 30 minutes for just INR 25K. The renters also get an all-inclusive EMI that includes insurance and maintenance as well.
“The initial customer traction we have achieved in a short time reinforces our belief in this space and we are on a mission to make vehicle ownership more affordable, hassle-free and quicker,” said OTO Cofounder Sumit Chhazed.
In the last six month, OTO has already leased over INR 10 Cr, said a press release. The company has leased over 40 cars per month on average and plans to grow 10 times by early 2020. The company has also set a target to increase its partnership with automotive dealers, banks and NBFCs.
The company uses these partnerships to provide capital and offer customers an alternative to finance automotive purchases. With the slowdown in the automotive sector, partnering with a car leasing company is also beneficial for the banks.
The partnership also helps the banks to offer flexible models of ownership. In addition, this also gives banks an opportunity to move into car leasing without changing the loan process, which, in turn, will help banks and NBFCs to serve a newer and wider set of customers.
Till now, the company has raised INR 5 Cr in its first funding round led by Venture Catalysts and angel investors K. Ganesh and Sameer Sawhney. The company currently employs 20 people and will soon be setting up a new office in Bengaluru.