Car-leasing financier OTO Capital to offer insurance products
OTO Capital, a car leasing finance company, has raised seed funding of ₹5 crore, led by incubator Venture Catalyst. Among other investors who participated in the round were veteran angel investors K Ganesh and Sameer Sawhney.
Founded by IIT-Bombay alumnus Sumit Chhazed, along with Harsh Saruparia, OTO Capital launched operations in October. It provides easy finance options for buyers looking to lease a car for the long term; it also allows them to sell and upgrade them in a hassle-free manner. The start-up is also planning to offer insurance products soon.
Chhazed, OTO’s co-founder and CEO, said: “We offer a new way of financing cars with flexible usage terms that appeal to millennial customers. Now a customer can walk into a showroom and take a car home within 30 minutes paying the initial amount of as low as ₹20,000. He/she pays for a car with up to 30 per cent lower monthly instalments, with an option to upgrade or own it at the end of the tenure.”
Chhazed is also the founding member of CredR, a platform for buying and selling pre-owned two-wheelers.
The Mumbai-based start-up already has partnerships with over 100 car showrooms and corporates. India’s car ownership market is at $40 billion, and is still growing despite the mushrooming ride-sharing market.
Apoorv Ranjan Sharma, cofounder and President of Venture Catalysts, told BusinessLine: “OTO Capital has cracked the code to alter the way car ownership is perceived in India. It also has a very strong technology backbone and the first-mover advantage in the country. Further, its robust margins, which are almost 2.2 times that of other car financing platforms, display its solid potential to completely disrupt the way Indians look at car ownership and financing.”
OTO Capital leverages car usage patterns, uses data analytics, and real-time market inputs to determine the accurate residual value of a vehicle, and the EMIs that customers pay are lower than any other financing options.