Spinny Gears Up for Major Acquisition in the Indian Automotive Market
Spinny, an Indian online marketplace for used cars, is raising around $160 million as it moves to acquire car services startup GoMechanic, TechCrunch has learned.
The Series G funding round, which comprises a mix of primary and secondary transactions, is projected to value the 10-year-old startup at approximately $1.8 billion post-money, according to sources familiar with the details. This valuation aligns with Spinny’s previous funding rounds, indicating stability in investor confidence.
Funding Breakdown
Nearly $90 million of the current round is raised through primary transactions. Existing investor Accel has already invested about $44 million, information that surfaced through recent regulatory filings in India, first reported by Indian outlet Entrackr. Although a new investor is confirmed to be partaking in the remaining primary portion, specific details remain undisclosed.
WestBridge Capital is also reaffirming its support, investing a sum comparable to its prior funding. Earlier this year, the firm contributed nearly $35 million to $40 million in Spinny’s Series F round. The secondary portion of this funding round predominantly consists of shares being sold by Indian VC firm Fundamentum, while Blume Ventures is likewise expected to divest a portion of its holdings.
None of the parties involved, including Accel, Fundamentum, and Blume Ventures, have responded to requests for comments, and WestBridge Capital opted to stay silent on the matter.
Utilization of Funds for Acquisition
The latest funding round is strategically raised to finance the acquisition of GoMechanic and to bolster its platform, allowing Spinny to conserve its existing cash reserves for operational needs. Reports indicate that Spinny is poised to purchase GoMechanic for around ₹4.5 billion, roughly equivalent to $49.70 million, through a cash-and-stock arrangement.
GoMechanic is coming off a tumultuous period, having been acquired in 2023 by a consortium led by Lifelong Group after the startup acknowledged significant inaccuracies in its financial reporting. Previously, it had garnered backing from well-known investors including Sequoia Capital, Tiger Global, and SoftBank.
Expanding the Value Chain
For Spinny, acquiring GoMechanic is a strategic move aimed at enhancing its footprint across the used-car value chain. Based in Gurugram, Spinny has made strides in the automotive market, currently selling about 13,000 used cars per month directly to consumers and, to a lesser degree, to dealers through its auction platform. The company operates substantial reconditioning centers to refurbish vehicles, but it has relied on third-party service providers for after-sale servicing—a gap that GoMechanic could effectively address.
Further, GoMechanic is expected to function as a “two-way” funnel for Spinny. It could service vehicles bought or sold through Spinny, while also attracting car owners who are not yet clients. This could help Spinny increase its vehicle supply without incurring substantial customer acquisition costs.
Market Growth Potential
The proposed acquisition of GoMechanic comes at a time when India’s used-car market is predicted to expand at a compound annual growth rate of about 10%, reaching approximately 9.5 million units by 2030, compared to nearly 6 million units today, as reported by Mahindra First Choice and Volkswagen Pre-owned Certified.
The GoMechanic deal would mark Spinny’s latest endeavor to enhance its presence in India’s automotive sector. Recently, the startup broadened its scope beyond used-car sales by acquiring notable auto publications, including Autocar India and What Car? India, from the London-based media group Haymarket. It has also launched Spinny Capital, a non-banking financial services firm aimed at providing vehicle loans to customers.
Spinny co-founder and CEO Niraj Singh has refrained from commenting on these developments.
For further details, you can read the original article on TechCrunch Here.
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