Two-wheeler financing startup Bike Bazaar said it had raised Rs 170 crore of equity funding led by Women’s World Banking Asset Management (WAM) with participation from existing investors, including Elevar Equity and Faering Capital.
Elevar, who made the first investment in Bike Bazaar, still holds a large stake in the business.
The company wants to use the funds to expand its marketplace business for the sale and purchase of second-hand two-wheelers and its business in rural India.
Bike Bazaar, which was originally founded in 2017 as a used two-wheeler financing company by former Bajaj Auto executive Srinivas Kantheti and former Bajaj Finance executive Karunakaran Vadakkepat, now operates a wide range of businesses in the two-wheeler market, including a marketplace for pre-owned two-wheelers, a new electric vehicle financing business, as well as additional services like leasing and insurance. According to officials, it will also add servicing.
Before starting, the founders had spent decades in automotive and its associated financing space.
“Our strategy is to be present across the whole lifecycle of the two-wheeler,” Vadakkepat said. “For example, someone who is looking to buy a two-wheeler may want to exchange his old two-wheeler. He can avail of both the financing services and the resale service from us. We should be able to sell that old vehicle through our marketplace, or different pre-owned sales channels. We want to add value-added services like RTO transfers, insurance, etc, and over time we want to add services also. Actually, we want every business to feed on the other business so that we can leverage costs.”
He said that the company is in discussions to raise an additional Rs 80 crore and is also in advanced discussions with a foreign investor to raise an additional Rs 200–250 crore fundraising round exclusively for its EV business.
Vadakkepat stated that the company is still figuring out how to structure itself to accommodate the funding for the EV business.
Bike Bazaar claims to have a significant presence in smaller towns and over 1,000 touchpoints in over 140 cities across India. Its financing business has disbursed over 3,000,000 two-wheeler loans to date, with a cumulative gross transaction value of more than Rs 1,500 crore as of July 2022. In addition, the company has raised a total of Rs 400 crore in equity funding since its inception.
Bike Bazaar has set up multiple cash collection points to ensure loan repayment. In addition, bike Bazaar works with several banks and NBFCs to issue loans. According to Vadakkepat, the startup will typically have a 20% exposure to these loans.
“Women’s World Banking is dedicated to women’s economic empowerment and WAM is investing in Bike Bazaar’s demonstrated potential to provide accessible and affordable two-wheeler finance to financially underserved women in India, simultaneously enabling their mobility and developing their asset bases and credit profiles,” said Christina Juhasz, a chief investment officer of Women’s World Banking Asset Management.
WAM is funded by the German government’s Federal Ministry of Economic Cooperation and Development and The European Union.
