Car maintenance marketplace Zonnett is in advanced talks with several high-profile investors to raise its Series A round of funding, a top company executive told VCCircle.
Kanishka Garg, co-founder, Zonnett, said the company intends to raise the capital for geographic expansion and new product development. It plans to expand its footprint to five cities including Delhi-NCR, Bangalore, Hyderabad, Chennai and Ahmedabad.
Garg said the company, which is operated by Mumbai-based Driving Mind Innovations Pvt. Ltd, is in discussions with several investors based out of Mumbai and Bangalore to raise Rs 33.4 crore ($5 million).
“We are currently talking to two top family offices and a globally reputed oil company for raising the capital,” Garg said. He said among the prospective investors, the oil firm is keen to invest as “this is a direct push to its main business.”
The company, which was launched in August last year, is also in talks with several technology-focused venture capital firms to raise funding. “One of the funds which has showed interest has to date backed 40-50 startups in Series A to Series C rounds of funding,” Garg said, without disclosing the name of those potential investors.
Garg, who had earlier worked with YES Bank and investment banking firm Avendus Capital, said the company has signed several non-disclosure agreements (NDA) for the deal. He said the fundraising process will be completed by October.
A marketplace for local garages, Zonnett has 110 workshops under its banner in Mumbai and Pune. It offers services through its mobile app, website and a toll free number and claims to be generating over 200 queries a day on its platform.
“It is a difficult task for a car owner to find a trusted service provider at an affordable price. We realised that there is a huge price gap between authorised dealers and local garages, and how difficult it is for a car owner to find a trusted service centre that does not charge an exorbitant amount,” Garg said.
The firm has also tied up with reputed fleet owners, cab aggregators and corporates to provide a one-stop solution for car maintenance and repair services. It claims its rates are about 30% cheaper than those provided by other service providers in the market.
Highlighting the potential of the tech-enabled platform, Garg said car maintenance and repair space in the country, estimated to be Rs 20,000 crore, is a highly unorganised one. “More than 70% of the space is controlled by local car garages and doorstep mechanics,” he said.
The company raised its angel round of funding of Rs 2.5 crore in January from several investors, including Whats-ON-India founder Atul Phadnis and Rothschild India MD Chandresh Ruparel.
The firm competes with the likes of Mumbai-based MotorExpert, Cross Roads India Assistance Pvt. Ltd, Helponwheels.in, TVS Automobile Solutions Ltd’s MyTVS, Rescuefirst.com and Carzcare.com in the online auto servicing segment.
The auto maintenance marketplace sector has attracted several deals in the recent past. In May, MotoMojo, a mobile app-based marketplace that connects owners of two- and four-wheelers with service stations, raised an undisclosed amount in angel funding from the founders of startup enabler VentesAvenues.
Last year, Bangalore-based automotive services marketplace Cartisan raised an undisclosed amount in seed funding from Global Founders Capital, Yuvraj Singh’s YouWeCan Ventures, TaxiForSure founder Aprameya Radhakrishna and others.
The automotive after-market servicing business in India is pegged at about $2 billion (excluding spare parts), as per a joint study by the Confederation of Indian Industry (CII) and the Automotive Components Manufacturers Association (ACMA).
Like this report? Sign up for our daily newsletter to get our top reports.