According to a JM Financial report, the pre-owned car market in India is set to more than double to 8.2 million units or $47 billion by 2026 from 4 million units or $17 billion in 2021. The growth in the market is also driving the growth of the used car vendors such as Spinny, which recently joined the Unicorn club.
Spinny’s Offerings
Founded in 2015 by Ganesh Pawar, Mohit Gupta, Niraj Singh, and Ramanshu Mahaur, Gurgaon-based Spinny is a tech-powered used car retailing platform. The company brings trust and simplicity to the Indian used car market, thus delivering a user friendly, trustworthy, and hassle-free experience to its users.
Spinny believes that the used car market in India lacks trust. To build that into the equation, the company buys cars from the owners, performs a thorough and transparent inspection, and then makes them available for customers to purchase. Additionally, it offers buyers access to interactive features such as Spinny360, which is an interactive inventory viewing capability, an assured buyback program that allows tenure-based flexible car ownership, online booking, and doorstep test drives and delivery. By using a full-stack business model, it offers value, transparency, and simplicity to its customers.
The service has over 23 car hubs that operate across 15 cities including – Delhi-NCR, Bengaluru, Mumbai, Pune, Hyderabad, Chennai, Kolkata, and Ahmedabad. It plans to expand its presence to over 25 cities by the end of 2022.
Spinny’s Scouto Acquisition
Recently, Spinny announced its acquisition of AI-powered car connectivity player Scouto. Ahmedabad-based Scuoto has built an end-to-end connected car technology suite that provides detailed intelligence on the car’s health and performance. The acquisition will allow Spinny to use Scouto’s end-to-end connected car technology suite into its own offerings. It will allow the vehicle owner to connect to automotive service providers like insurers and Fastag issuers, thus augmenting the capabilities provided by both Spinny and Scouto,
Spinny’s Financials
The company recently reported a 45% increase in losses compared to INR76 crore (~$9.7 million). It also announced revenues of INR39.7 crore (~$5.07 million), growing 124% over the year. The company is seeing positive contribution margins in five of its cities and believes that it can become profitable if it chose to. Right now, Spinny wants to invest in growth to expand its market presence.
As of December 2021, Spinny’s gross merchandise value (GMV) grew 5X to $300 million. It expects to hit $1 billion in GMV next year. The company sold nearly 3,500 used cars on its platform in November 2021 and was looking to close 2021 with sales of 85,000-90,000 units.
Spinny has raised $513.5 million in eight rounds of funding led by Sachin Tendulkar, Think Investments, Arena Holdings, Avenir Growth Capital, Abu Dhabi Growth Fund, Tiger Global Management, General Catalyst, GC DF Ventures, and FJ Labs. Its most recent round was held in November 2021 where it raised $283 million at a valuation of $1.8 billion. It has seen a meteoric rise in its valuation. As of July 2021, the company was valued at $700 million and a comparatively modest $350 million in April 2021.
The lofty valutions of these Indian Unicorns continue to puzzle me. Spinny competes with the likes of CarTrade, Droom, CarDekho, and Car24, along with the usual car dealers in India. All of these companies are seeing high growth in their markets. Recently, Cars24 was valued at $3.3 billion, and almost all of these players are looking to go public soon. Droom, for instance, was looking to close last year with reveues of $65 million and had already clocked a valuation of $1.8 billion. Similarly, CarDekho with revenues of over $100 million boasted of a valuation of $1.2 billion as well.
I would like to see Spinny publish detailed financials and other metrics to support these valuations.
Photo Credit: Rahul Soni from Pixabay
This segment is a part in the series : Indian Unicorns 2022