Spinny has opened one of India’s largest car hubs for second-hand cars in Bengaluru as the Tiger Global-backed used car retailing unicorn expects demand to stay strong even at a time when people are cutting down on discretionary spending amid recessionary fears.
The showroom, which the company calls an automobile experiential hub, is named Spinny Park and is spread over five acres of land near Yelahanka in Bengaluru, the company said in a statement. Spinny Park, in full capacity can accommodate as many as 1,000 cars, Niraj Singh, founder and chief executive officer (CEO) of Spinny told Moneycontrol, on the sidelines of the launch of the park.
Singh said that he is witnessing strong demand in Bengaluru as the city contributes nearly 8 percent to its overall sales. He also said that Bengaluru is the largest hub for Spinny followed by Delhi/NCR (National Capital Region) and other large cities of the country including Mumbai, Pune, Chennai, and Coimbatore. According to Singh, the average selling price in Bengaluru, too, is the highest at Rs 6.4 lakh, compared to an average order value of Rs 5.7-5.8 lakh in the entire country.
Singh also said the company is witnessing robust growth month-on-month as people have started looking at cars as a necessity more than a luxury after the pandemic.
“In October, we were expecting a 9-10 percent kind of month-on-month growth but we ended up getting 20 percent growth over September,” he told Moneycontrol.
“Every year, the month immediately after Diwali is slightly lower. So we were expecting 4-5 percent of degrowth over Diwali. But with the trend so far, we are very confident to do higher than what we did in October. So we aren’t seeing any inflation-related blip, at least so far,” Singh added.
Founded in 2015, Spinny claims to run more than 55 car hubs and is operational in 22 cities. Last year, Indian cricket legend Sachin Tendulkar made a strategic investment in the company. The firm claims every car on Spinny goes through a 200-point checklist and customers can return the car in five days after purchase with no questions asked and a money-back guarantee and offers one-year after-sales warranty.
The company had raised $250 million in primary fundraise from Abu Dhabi’s ADQ and existing backers Tiger Global Management and Avenir Growth, and Feroz Dewan’s Arena Holdings and Think Investments in December last year, which had valued the startup at $1.8 billion. It is India’s fourth online car retailer to become a unicorn, after Cars24, CarDekho, and Droom.
The company had clocked a revenue of Rs 39.7 crore in FY21 (2020-21), which had more than doubled from Rs 17.7 crore in FY20 (2019-20). However, its losses, too, swelled to Rs 110.3 crore during the year from Rs 76.2 crore in FY20, thanks to an over 30 percent surge in advertising and marketing costs.
In October, Spinny launched an employee stock ownership plan (ESOP) for all its employees. All of Spinny’s employees irrespective of role and designation, including blue-collar workers, would be eligible to receive stocks through the ‘Spinny Stock Option Plan for All', the company said on October 4. The Tiger Global-backed unicorn had facilitated an ESOP buyback of $12 million in December last year, which included buying back shares from many early and blue-collar employees.
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