Online auto-focused after-sales and spare parts startup, GoMechanic has launched a Rs 30 crore partner stock option plan (Psop) to incentivize its service partners, workshops, retailers, distributors and consultants.
The stock options will have a 4-year vesting duration with yearly vesting at 25% and a cliff period of one year.
“This (mechanics, workshop employees) is a segment which has been traditionally underserved. We believe that benefits should be extended to them as well, who are often left out of mainstream finance. Our endeavour is to get them under the big umbrella of GoMechanic’s Psop,” Kushal Karwa, co-founder, GoMechanic said in an interaction with VCCircle.
The GoMechanic Psops are currently available to a select number of big partners that have been affiliated with GoMechanic for longer than a year. At the same time, it also intends to expand the advantages of this concept to newly onboarded partners, Karwa said.
The company is also partnering with NSDC (National Skill Development Center) and aims to upskill over 5,000 mechanics in over 1,500 workshops across India.
“In India, we are present in more than 40 cities on our service network now, and we provide spare parts to many other cities as well. We supply spare parts to over 100 cities as of now. We believe that the model GoMechanic has built in India over the last six years can be replicated in other developing countries, especially the ones that face similar logistics and automotive issues as India,” Karwa said.
GoMechanic, which is operated by Targetone Innovations Pvt. Ltd was founded in 2016 by Amit Bhasin and Karwa. The company provides services such as car maintenance, cleaning, wheel rim care and denting services. GoMechanic operates in a franchise-owned company-operated (FOCO). It has a presence in over 60 cities and partners with over 1,500 workshops across India.
GoMechanic competes with competitors like Pitstop, GoBumpr, Carpathy, and Mahindra First Choice in the aftermarket automotive service scene.
Commenting on GoMechanic’s model, Karwa said, “We are not a franchisee-led model; we don’t charge franchisee fees from these workshops. Instead, we operate on a revenue share model so the amount of business that they do per month is recorded on our workshop management system. This gives complete visibility of what cars are done, what spare parts are used and who else is working on it. One of the big reasons why we don't charge an upfront franchisee fee is because in previous avatars, models have failed with other players and by charging a plain vanilla franchisee fee”.
In June 2021, GoMechanic raised $42 million as part of its Series C funding round led by Tiger Global. Before this funding, GoMechanic raised $14.7 million in a Series B funding round in December 2019.
In January 2019, the startup raised $4.9 million (around Rs 35 crore) in its Series A funding round, which was led by Sequoia and Orios Venture Partners. In December 2016, it raised $250,000 (nearly Rs 1.68 crore) from seed investment and innovation platform Venture Catalysts. In 2017, GoMechanic acquired car servicing and repair startup VOW CarClinic.