People have been looking for a suitable platform to purchase a used car for a long time. Earlier people used to buy second-hand cars by directly contacting the owner. This was indeed a cumbersome process, as coming in direct contact with the seller was quite a difficult task and people had to get involved in the bargaining process. The procedure of buying a used car is laborious and overly complicated. Independent sellers offer a wide range of rates and services to entice people to buy cars of dubious quality. Choosing from a pool of mint and lemon autos, for example, has a high probability of bad selection for a layperson. That’s where Spinny comes in. Nowadays, with the boom of e-commerce and e-retail platforms, we have certain platforms like Spinny which are making the buying and selling of a car much more convenient. Spinny is a new age platform that enables trustworthy and hassle-free transactions in the used-car market.
Spinny’s Origin Story: Getting into the Market
Having a car is a dream for every Indian family but due to financial restrictions, many people go for buying used cars. In June 2015, Niraj Singh, Ramanshu Mahaur, Ganesh Pawar, and Mohit Gupta embarked on a mission to develop Spinny in order to sift out the quintessential problems of difficulty and scepticism and break down the arduous process into a one-click solution. Spinny is an innovative way to purchase and sell used cars on the internet as well as bring lucidity and accountability to the used automobile market. Removing superfluous expenses, lowering paperwork, and terminating all inconveniences replaces the time-consuming process of buying and selling cars. The startup started in Gurugram and is currently operating in six cities including Delhi NCR, Hyderabad, Chennai, Bangalore, and Mumbai. Niraj Singh – an IIT graduate and the current CEO – invested $500,000 from his own fund. Today many investors have invested in the company and have made a profit of around Rs. 418 crores. Niraj recognised the need to provide a quality experience for individuals buying used automobiles and planned to construct a simple and clear platform to gather information and purchase a car.
The asymmetry of information available in the process of used car purchases has been a key roadblock.The used car market is highly unstructured with independent dealers and curbsiders dominating a large chunk of the market. Only 3-4 per cent of buyers are satisfied after buying used cars. Spinny is all about providing openness and efficiency to the used automobile purchasing and selling experience. According to the founders, consumers can use the platform to hunt for not just different varieties of cars, but also other value-added services. This covers services such as automotive inspections, test drives, registration transfers, and giving auto warranties to customers, among others.
Spinny is a new-age reseller platform that specialised in facilitating the sale and purchase of used cars with their USP being, complete transparency.
How is Spinny different from all other companies?
There are several business models in the used car industry. There are auction-based and classified companies like Cars24, CarDekho, OLX, and Quikr; franchises and companies like Mahindra First Choice and True Value. Then there is Droom, an online marketplace to buy and sell used vehicles. All these companies are seller-based platforms that focus mainly on selling cars. Spinny on the other hand is a buyer-based platform that focuses on buying good quality used cars and then selling them at a reasonable price.
Not only is it one of few companies to continue with its money return policy during the time of COVID, but also one of the first companies to adopt a full contactless dealing management and providing home deliveries. The Spinny Star Rating engine employs a unique algorithm to calculate a used car’s rating based on inspection data. The goal of this grade is to give you a fast idea of the vehicle’s genuine condition. Every car listed on Spinny has been certified by our in-house vehicle professionals and is covered by a one-year warranty that includes the engine, transmission, electrical systems, and suspensions. The cost of the warranty is included in the listing price of automobiles with the Spinny Assured tag, but if you want to include the warranty in your automobile purchase, you must pay for it separately. They initiated a set of features to make buying a car an entirely hands-off experience. To solve the liquidity shortage that many people are experiencing during these uncertain times, making owning a car more realistic and cost-effective than renting or subscribing to one. One of the distinguishing features between Spinny and other platforms is Spinny360.
Thanks to Spinny360, customers now can see the interior and exterior of any vehicle in the inventory online exactly as they are in person. This will finally assist them in making a clear selection and will also provide them with a clear picture of the vehicle’s condition. The feature uses a state-of-the-art studio with high-definition cameras that capture detailed images of the car. In addition to all of these, It seems like with Spinny coming into the market, one could observe that there is more popularity of buying used cars as compared to new ones and according to sources, on each new car, three used cars are getting sold.
Rise of Spinny during COVID
Previously, people would only buy new cars to increase their economic value, but as time has passed, this has changed. There is a shift towards buying used cars. Around 65 per cent of India’s population is under 35 years and for young buyers, buying a second-hand car is a much more sensible decision to be prepared for uncertainties in the future. Spinny saw a 20 per cent increase in sales over the previous year, owing to the fact that cars are now seen as a need rather than a lifestyle choice. Even with the lockdown in place, Spinny had sold over 6000 cars by October. Spinny had seen a 20 per cent rise in demand in 2019 compared to the previous year, with the majority of the credit going to its young customer base. Spinny targeted the young buyers to give them a way to have good quality used cars and today around 80 per cent of their buyers are under the age of 35. The cultural stigma which is there regarding used cars is somehow coming to its end and that helped them in the growth during the festive season as well. Even during the time of COVID when we suffered an economic breakdown, Spinny sold over 5,000 used cars last year with the total number clocking over 9,100 units. Despite liquidity concerns, they sold a total of 9,100+ cars in 2020, owing to an increased network and more clients wanting safe personal transportation. Regardless of the lockdown, they sold almost 2,700 automobiles between July and August. They reached 5,000 automobiles in 2019 and were able to meet their pre-covid goal for 2020.
Shifting of the working model
Before Spinny, there were already many companies that were providing used cars but to be in the market, one needs to be unique and creative. Earlier, Spinny used to follow a simple procedure of selling cars where they check the quality of the car then connect the buyer and the seller. This procedure had some trust issues, as later, the buyer could pull off the deal or the seller. It was very necessary to have some changes in the structure so they opted for a new model for the dealings.Now, the seller first contacts Spinny and they offer a fair price for the car, and if the seller agrees, the car will go through a quality test of around 200 factors before getting on board on their app and all the paperwork is done before taking custody of the car. Then after servicing, polishing, and waxing of the car, the car is put on board for selling with all the basic details of the quality of the car. Spinny’s idea is to make buying a used car as simple as buying a new car. Spinny tries to give each and every accurate detail of the car to give the buyer a clear idea before buying. They also provide at which hub the car is parked so that the buyer can directly go to the hub to check out the car. But the deal is not over after buying a car, Spinny tries their best to maintain a good relationship with the customers even after the deal as former customers could refer many other people to try buying a car from Spinny. In order to give an even better experience than a brand new car, Spinny gives a full tank of fuel to all their customers. The main issue which one usually has while buying a second-hand car is the quality of the car and its value for money. The main focus of Spinny is to give a quality car and that is why it does not negotiate the price with the buyer or the seller.
The Money behind the Machine
The five-year-old India startup has concluded its Series C funding round, receiving $65 million from General Catalyst and others in Silicon Valley for a post-money valuation of $350 million. The new round was led by General Catalyst of Silicon Valley, with participation from Feroz Dewan’s Arena Holdings, Think Investments, and current investors Fundamentum Partnership (supported by tech veterans Nandan Nilekani and Sanjeev Aggarwal) and Elevation Capital. The round, which brings Spinny’s to-date raise to more than $120 million, valued the startup at about $350 million, up from about $150 million a year ago. Spinny changed its business strategy from customer-to-customer to full-stack, where it buys, refurbishes, and sells used cars. Every month, the platform sells around 1,500 cars and continues to expand at a consistent rate of 15-16 per cent month after month. Spinny, with its 900 people in nine places, with ambitions to expand to six more by 2021. It now sells used cars in the Rs 4-8 lakh range, but it intends to expand its offers to include both lower and higher-value vehicles. The extra funds will be used to improve customer experience, grow into new markets, increase technology and product capabilities, establish new business categories, and establish cross-functional teams.
Being successful as a brand in the used car market is a tough business as you are essentially working with run-down products. Therefore, Spinny makes sure all cars go through thorough checking before being sold.
What Does the Future Hold for Spinny?
Right now, Spinny is working in a few cities like Noida, Delhi (two hubs), Gurgaon, Pune, Hyderabad, Bengaluru, Mumbai, Chennai. Their plan is to expand their business to Kolkata and Ahmedabad soon. After their great sale in 2020, the momentum and confidence are obviously high and they would like to keep the momentum going. According to the study, the used car market is set to go around 7.2 million units by 2022 as now people are opting to buy more used cars. But to maintain the reputation and the legacy, Spinny needs to maintain trust and transparency with their customers. With so much increase in sales last year, Spinny is no longer a young company and has to compete with established brands like Cars24, CarDekho, etc. Spinny has several plans in the works for the future. The first goal is to expand into as many places as possible by the end of 2021, with the team focusing on providing more high-quality cars.