OTO Capital, which provides financing solutions for two-wheeler buyers, is gearing up for its next phase of growth. On Tuesday, the company said it has raised $6 million (around Rs 44 crore) as part of its Series A funding round led by Matrix Partners India.
Apart from expanding operations to 15 new cities — including Delhi, Indore and Vijaywada – the company will also use the fresh capital to hire across verticals such as technology, product, marketing, and operations, according to a statement.
The startup currently provides services in five cities — Chennai, Bengaluru, Pune, Hyderabad, and Mysuru.
Existing and new investors such as Prime Venture Partners, 9Unicorns and Better Capital also participated in the funding round.
Prominent angel investors including Asish Mohapatra of OfBusiness, Ramakant Sharma of Livspace, Kunal Shah of Cred, K Ganesh of GrowthStory, and Ashneer Grover and Suhail Sameer of BharatPe also chipped in.
OTO Capital, operated by 1T9 Technology Pvt. Ltd, will use the fresh capital to grow its user base.
OTO Capital was co-founded by IIT Bombay alumni Sumit Chhazed and Harsh Saruparia in October 2018.
The startup provides financing options for two-wheeler buyers that require customers to pay an upfront amount like any other loan but get up to 30% lower EMIs with an option to retain, return or upgrade at the end of the tenure.
It has tie-up with banks and non-banking finance companies (NBFCs) to provide finances to its customers.
The startup claims that it grew four-fold in the last 12 months despite the coronavirus pandemic.
It has also maintained it non-performing assets (NPAs) below 1%.
In December 2018, OTO Capital had raised Rs 5 crore in its seed funding round led by Venture Catalysts.https://www.vccircle.com/venture-catalysts-leads-seed-round-in-car-financing-startup-oto-capital/ The following year, the startup raised Rs 10 crore ($1.4 million) from Prime Venture Partners.https://www.vccircle.com/fintech-startups-oto-capital-first-principle-labs-get-vc-backing
Apart from OTO Capital, startups and NBFCs such as CreditWise Capital, Berar Finance and WheelsEMI, which are also engaged in providing financing options to two-wheeler buyers, have attracted funding in the past years.