DriveX, the pre-owned two-wheeler buying and selling start-up is ready to take the plunge to the next level, and if things go by what Narain Karthikeyan, Executive Director and Founder of DriveX says, the start-up is slated to be “EBITDA positive by December 2024.”
Interestingly, in October it claims that its monthly revenue alone was similar to its full-year revenue for last year. “We are growing quite rapidly and by March we are targeted to do around Rs 15 crore per month in revenue.”
Founded in 2020, DriveX is a pre-owned two-wheeler buying and selling platform focusing on bringing digitalisation to improve transparency in the mostly unorganised segment. He believes that the Indian pre-owned two-wheeler space is exactly where the unorganised four-wheeler segment in India was a couple of year ago, before tech-led organised players disrupted the market.
“Presently, majority of the used two-wheeler trades happen through brokers. We are trying to bring this into organised space by providing test rides, proper documentation and warranties. We are also enabling the discovering phase to be available online,” he explains.
The company is also banking on the fact that after BS6 emission norms the average price of two-wheelers has gone up significantly, and hence, a lot many first-time buyers and people who wish to upgrade their two-wheelers to a higher displacement vehicle are warming up to the idea of a pre-owned two-wheeler.
Expansion and partnerships
DriveX is currently selling around 2,500 used two-wheelers per month, a small portion of the unorganised sector, but one with huge immense potential. The average selling price for a two-wheeler on the platform is said to be around Rs 65,000.
One also has to take into the fact that the three-year old start-up is focusing on limited geographies – 15 cities with 50 touchpoints (by December). Karthikeyan claims that the average turnaround time for a used two-wheeler on its platform is under 90 days and shrinking.
“Two-wheeler market is almost 10x the size of the four-wheeler segment in India, hence the opportunity too is immense.”
Interestingly, the company sees a aspirational buyers in the Tier 2-3 cities looking to upgrade to motorcycles “instead of buying a scooter they would want to upgrade to a sports bike in the 150cc and above segment.”
Responding to a query on aggressive expansion, Karthikeyan says the company aims to establish an aftersales service network that can support its customers before entering any new geography.
“We realised that without aftersales it’s going to be a bigger challenge to build a brand. One has to be very conscious of what you are selling in the market. With our 2 refurbished centres (Hosur and Coimbatore) with about 150 technicians and at full capacity we are able to service around 6,000 vehicles a month. We also leverage our partnership with OEMs (Bajaj Auto and TVS Motor Co) for dealership support. I don’t think that any other platform enjoys these tie-ups.”
The company has also established tie-up with Tata Green for two-wheeler batteries and JK Tyre & Industries for tyres. While it has already started selling DriveX Oil, in the near future it is also looking at white label goods as an expansion of its revenue stream.
Funding
It was in August last year that DriveX saw an investment of Rs 85 crore from TVS Motor Co for a stake of 48 percent. More than the funding, the start-up would have benefited from not only TVS Motor Co’s ecosystem but also the immediate credibility push.
Sudarshan Venu, MD, TVS Motor Co had stated that “DriveX has a vision to bring a change in this segment by building trust, assurance, and transparency through end-to-end, high-quality products and customer experience through innovative solutions. We are confident of DriveX ability to deliver on this vision.”
Going forward, while it has not yet formalised the exact amount of funding raise it aims to do, Karthikeyan tells us that “We will be in the market to raise some funds I think after June next year.”
With a strong business plan and credibility to its name, DriveX aims to become a leading platform for buying and selling of two-wheelers in India.
