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MotorExchange Raises Series A Round From Canaan

17 December, 2009

Used vehicle exchange platform MotorExchange has raised series A round of venture capital funding from Canaan Partners. MotorExchange, which provides sellers and buyers a platform for transacting used vehicles, targets dealers, institutional and individual sellers. The company charges a fee from buyers and sellers on these transactions.

Though Canaan declined to disclose the exact investment details, it is believed to be in the range of $2-5 million for a significant minority stake.

MotorExchange has been founded by former Mahindra First Choice CEO Vinay Sanghi and ex-eBay India head Rajan Mehra. Sanghi is currently the CEO, and Mehra, currently a venture partner at Clearstone Venture Advisors, is the founder-director. Alok Mittal, general partner at Canaan, is joining the board of MotorExchange.

“The funds from Canaan will be used to enhance the functionality of the product and operations of the company,” said Sanghi. The company launched its portal MotorExchange.in only days ago.

“Used car trade in India is a large, disorganised market and deals happen through local mom & pop stores. There is very little transparency and reliability in the process,” said Mittal in an interview.

MotorExchange has tied up with 12 banks and NBFCs like ICICI Bank, HDFC, Mahindra & Mahindra Financial Services as sellers on its platform. Sanghi says, there are about 14,000 used car buyers in India, and his company has already signed 800. He expects to increase this number to 2,000 in the next 12 months.

MotorExchange will operate on a B2B and C2B model. It also acquired CarTradeIndia, a car trade portal which operates in the C2C and B2C space, in a stock deal in August this year. This will help MotorExchange attract sellers from CarTradeIndia on its platform. CarTradeIndia continues to operate as independent website, and is now a division of the company.

The sale of used vehicles stood at approximately $11 billion in 2008 and is expected to double to $22 billion in the next five years, said Canaan, in a release. Of this, 60%- 70% is expected to go through the used vehicle auction platforms such as Motor Exchange. The banking segment alone sells Rs 2,000-2,500 crore of repossessed inventory every year, adds Sanghi, who has been in the used car business for 10 years.

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Alok gupta . 6 years ago

The idea of MotorExchange.in is pretty Interseting but how much funding have they received and at what valuation. In India the Vc market is pretty personalized and it does not work like a professional Investment partner.I believe if a Principal at a VC firm likes your business idea he may laze around for good time for no good reason and will let the startup do rounds and rounds of his office wasting startup’s precious time.I feel its only 1 or 2 professional VC firms that exist in India all other so called VC firms are just wasting time of startup’s. Another new startup coming up and may get funded very soon is http://www.seeitbookit.com

Rahul . 6 years ago

The idea seems good and iwish best of luck to motorexchange.in for future and hope that they will be able to bring some transparency in the unorganised care resale market.They can even come with a Standard’s body with car rating system on certain parameters. Best of luck team Motorexchange….

Talking about Indian VC’s they are like Indian beaurocrats who will go ahead and leave a good idea to just go with what their associates suggest.. Its always better to speak to US VC’s directly and get funded. they are faster, more transparent, and open to risk with lesser interference in day to day operations.

MotorExchange Raises Series A Round From Canaan

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