Bangalore-based Chatpay Commerce Pvt Ltd, a venture floated by co-founder of AngelPrime-backed kids apparel firm Unamia that had shut in 2014, has raised an undisclosed amount in angel funding from founders of Myntra and Livspace for its online car servicing platform Pitstop.
Founded by IITians Mihir Mohan Mishra and Nirant Ramakuru, Pitstop is a six-month-old startup that aims to standardise the unorganised auto service industry while offering a booking platform for repairs from garages and auto care centres.
“The automotive service industry is a closed system where manufacturers and dealers make most of the money and rest of the people in the ecosystem don't. When we were looking at this space, we found lot of issues including up-selling, lack of visibility and low customer satisfaction. We looked at bringing technology to create more visibility in the auto services industry,†Mishra told VCCircle.
Mishra had earlier co-founded Unamia.com that could not ride the e-commerce wave and was shut down a couple of years ago. He had then launched another venture named Tbox which aimed at disrupting the SMS management space. Tbox app is currently active.
On the other hand, co-founder Ramakuru is a former Flipkart executive and started his entrepreneurial journey with a 3D printing venture Structize.
Mishra did not disclose the funding amount but said it is under $1 million and was completed in November. The money was used to set up its base in Bangalore.
Currently on a ramp-up phase, the startup is looking to raise more funds to complete the cycle in Bangalore and expand to other cities. It is looking to raise fresh funding by February end.
Pitstop looks at tapping and standardising independent garages where service cost is relatively low compared with dealer service centres. “Pitstop acts as an agency which certifies these garages for quality for use of genuine parts and accessories, provide systems to garages so that they can serve a customer better, and do a better capacity planning,†Mishra said, adding, “With us, independent garages can see even number of orders throughout the week, and not just on weekends.â€
Currently operational in Bangalore, Pitstop has a network of branded and certified garages in two segments – first where people who have cars older than three years and are looking for a cheaper alternative in independent garages; and second segment is for people who own second-hand cars.
“We are keen to certify garages who can do 20 orders per day, and make sure that all the garages we have certified will provide genuine parts,†Mishra said.
Business model
Pitstop's business model is based on transactions. Users can go to Pitstop app and website and directly book services. Then, Pitstop passes on leads to garages in its network. These garages use Pitstop system for the entire lifecycle of the service. “By this, we get the visibility on the amount being paid, and we are the one who generates the invoice,†said Mishra.
The venture is also setting up a payment system so that customer can directly pay to Pitstop as it aims to make the transaction cashless.
“For payment, we are relying on
third-party vendors like Ezetap, for both point of sale and collection on door step. On the web, we are partnering with Paytm and PayU, and on the point of sale front, we have got Ezetap on our platform,†informed Mishra.
Pitstop charges commission to garages on every transaction which ranges 10-25 per cent.
The startup also gets commission from spare part dealers, when buying in bulk.
Expansion plans
Today, Pitstop has close to 25-30 garages in Bangalore. It aims to strengthen its base in its home city before moving to Mumbai, Delhi NCR and Chennai by June.
“And, then we will expand to tier-II cities like Indore, Ahmedabad, Jaipur and Ranchi. We have identified 40 cities where we aim to have our presence over two years,†Mishra said.
He said it aims to certify 45-50 garages in a city like Bangalore so that there's a wide geographical coverage.
The startup claims it does 125-130 booking (orders) a day. By 2016 end, it expects to do 500 orders a day, and aims for 3,000 orders a day in two years.
Mishra said, “3,000 orders a day means making Rs 1 crore a day and Rs 300 crore a month. In our third year of operations, we aim to make Rs 300 crore a month.â€
He sees competition in Bangalore from other ventures such as Bumper and Cartisan, among others. Recently, Bangalore-based Bumper, a mobile marketplace and booking platform for car servicing, secured $500,000 (Rs 3.3 crore) in seed funding from venture capital firm SAIF Partners. Earlier this 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.