OTO Capital, a startup that promises a faster lending in the automotive sector has just raised funding of Rs 5 crore. This is a seeding round and the major investor in this round is Venture Catalysts and there are others as well to have participated in the funding. Prominent among them are K Ganesh, an entrepreneur and angel investor and Sameer Sawney.
OTO Capital uses the latest technology to bolster its process of assessment of loan applications. They say techniques like data analytics, using market inputs on a real-time basis and car usage patterns to arrive at the residual value of a vehicle to be funded to as accurate a level as possible. This, they claim helps in bringing the value of the EMI to be paid by the borrower. OTO calls it OMIs meaning OTO monthly instalments. They have added some features like flexible loan repayment period from 3 to 5 years; the borrower has to option to change the vehicle too, during the pendency of the loan. The upfront payment is also kept at the bare minimum to make it convenient for the borrowers. OTO Captital helps with the resale of the car as well if the customer wants.
It is estimated that the car ownership market is around $40 billion.
The two founders of OTO Captial, Sumit Chhazed and Harsh Saruparia come from a rich background, having been associated with startup ecosystems and should find their experience come useful at OTO. Explaining their business model, Sumit Chhazed says they call it “Own Together” and a customer could walk into their showroom and pay as low as Rs 20, 000 and drive away the vehicle is just 30 minutes. Having kicked off their operations just this October, they plan to have over 100 showrooms.
Speaking on his decision to invest in OTO Capital, Dr. Apoorv Ranjan Sharma, Co-founder and President of Venture Catalysts said, “OTO Capital has cracked the code to alter the way car ownership is perceived in India. The company also has a very strong technology backbone and the first mover advantage in the country. Further its robust margins, which are almost 2.2X of other car financing platforms, display its solid potential to completely disrupt the way Indians look at car ownership and financing. We are thrilled to add OTO Capital to our portfolio and become a part of what promises to be an amazing growth story in the days to come.”