Vehicle Financing Startup OTO Bags $10 Mn To Scale Up EV Two Wheeler Playbook

Vehicle financing startup OTO has secured $10 Mn (over INR 8.3 Cr)  in a funding round led by GMO Venture Partners, with participation from Turbostart and cricketer KL Rahul. 

The round also saw participation from existing investors Prime Venture Partners, Matrix Partners, 9Unicorns and a few other undisclosed family office funds.

OTO will use the fresh capital to expand to more than 30 Indian cities, transitioning into the electric vehicles category and strengthening its existing partnerships. 

OTO has partnered with two-wheeler brands like Ola, Hero Motocorp, Royal Enfield, and Suzuki through their dealership networks.  

“This funding marks a pivotal moment for us at OTO. Our focus has always been on making two-wheeler ownership convenient, affordable, and accessible. We’re leading the charge in the two-wheeler EV sector with our digital-first strategy, and this investment will further fuel our initiatives in that direction,” said OTO’s co-founder and CEO Sumit Chhazed.

Founded in 2018 by Chhazed and Harsh Saruparia, OTO offers a leasing-like financing model for two-wheeler purchases. It lets buyers pay a similar upfront payment like any other loan, pay up to 30% lower EMIs and have the option to own the two-wheeler at the end of the tenure or sell it back. 

The company claimed to have crossed the INR 550 Cr mark in two-wheeler loan distribution in November 2023 in sales of 75,000 two-wheelers. 

“We are confident that by utilising AI/LLM in their services, OTO has the ability to redefine the global two-wheeler industry, thereby creating significant value for both customers and investors,” said GMO Venture Partners’ co-founder and director of board Ryu Muramatsu. 

The startup works in partnership with various banks and NBFCs to provide hassle-free financing options to its customers. It claims to have experienced remarkable growth by providing digital convenience and a spectrum of affordable, flexible financing options to motorcycle enthusiasts during the past couple of years during the pandemic. 

The startup last raised $6 Mn in a Series A funding round led by Matrix Partners India in 2021. 

The company’s electric push also saw it partnering with E2W manufacturer Ather Energy in November 2023. Further, the company also unveiled a strategic partnership with green financing solutions company Mufin Green Finance in December. 

The startup’s EV push coincides with the boom that the EV financing market is currently witnessing. As per NITI Aayog, the two-wheeler EV market size is going to be as large as INR 35K Cr-INR 40K Cr by FY26, with the EV financing market for this segment expected to touch INR 13K Cr-INR 15K Cr by then.