Spinny and Truebil, two of India’s biggest start-ups in the online used-vehicle space, have joined hands to tap the burgeoning second-hand car market.
Gurugram-based Spinny will acquire 100 percent of Mumbai-based Truebil for an undisclosed sum, top officials of both the companies confirmed to Moneycontrol. By the end of FY20 India's used car market is estimated to be over 4 million cars.
“We have had significant growth last year which is when Truebil was the largest player in the segment. Truebil had scaled down its operations when COVID-19 hit the market. We are not merging the business of the two companies but we are instead acquiring the technology platform, brand and the products of Truebil,” Niraj Singh, founder of Spinny said.
Truebil is a natural fit for Spinny. While Truebil scaled up its technology to depend on algorithm ably aided by other analytical tools for generating best consumer engagement, Spinny was able to raise funds in a relatively short period.
In less than a year Spinny raised a little over $57 million from a bunch of popular investors including Nandan Nilekani-owned Fundamentum Partners, SAIF Partners and Accel Partners. The deal also gives Spinny the entry into the Mumbai market. The company presently has operations in Delhi, Pune, Bengaluru, Gurugram, Noida and Hyderabad.
“We will allow the Truebil platform to operate for some time. We will later reassess if it makes sense to continue with it or should we merge it with Spinny. We operate in cars priced between Rs 3 to Rs 10 lakh, whereas Truebil operates in the band of Rs 2-4 lakh,” Singh added.
“Even if we had not acquired Truebil we would have started building that part of the business on our own because we had earmarked separate investment for it. But what would have taken us two years to achieve, we have done it now by this acquisition,” Singh added.
None of Truebil’s investors such as Kalaari Capital, Inventus, Shunwei Capital and Japanese investor Joe Hirao will stay invested after the buy-out by Spinny. Both Truebil and Spinny were born in 2015 and were competing with each other in a couple of markets such as Delhi and Bengaluru.
While Truebil was slower in expanding its business to new cities Spinny was much faster. Truebil had to even scale down its business following the COVID-19 outbreak and there was no transaction happening on its website since the past few months due to the deal.
“We realised it might take more than a year to revive the business and there was a player who had the backing of the Tier 1 VCs and it was not making sense for us to continue fighting in the same market with the same business model. That is why we decided to join forces. We build the technology part of the business and Spinny raised capital. So it was a very ideal fit,” Shubh Bansal, one of the seven co-founders of Truebil, told Moneycontrol.
Last year Truebil reported a growth of 5X compared to 2018. At that time the company was recording Rs 30 crore of revenue, while gross merchandise value was around Rs 40 crore.
A little more than two years ago, Truebil ventured into the brick-and-mortar medium from being an exclusive online marketplace company. The company buys cars at auctions, refurbishes them and makes a double-digit margin selling it to buyers.
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