When it comes to buying cars, the average Indian wouldn’t do this. But when it comes to getting the same cars fixed, unauthorised service centres are rather popular. There are over 300,000 unauthorised ‘aftermarket’ workshops in the country, as opposed to just a few thousand that are authorised.
Despite that wide chasm on the aftermarket highway, local workshops only service 30% of India’s cars, according to Mihir Mohan, the founder of Pitstop, a car workshop aggregator. Its competitor, GoMechanic, sees a big opportunity in organising parts of this industry.
A $70-million startup in India’s $10-billion aftermarket industry, GoMechanic—founded by Amit Bhasin, Kushal Karva, Nitin Rana and Rishabh Karwa—wants to turn the business into an OYO for car fix-ups. Much like the Indian hospitality unicorn aggregated budget hotels and turned them OYO-branded when it started out in 2013, GoMechanic finds talent and workshops, and takes them under its wing.
The Gurugram-based company wants to expand from its existing 220 workshops to 1,000 in 20 Indian cities by the end of 2020. It also wants to eventually start approaching the existing 100,000 workshops that fit within its parameters across the country. The company has raised over $20 million in two funding rounds from VC firm Sequoia and Mumbai-based Orios Venture*, with Chiratae Ventures, formerly known as IDG Ventures India, joining in Series B, as per data sourced from business intelligence platform Tracxn.
It’s not an impossible dream either. Unlike other players—like Mumbai-based Mahindra First Choice and Germany-based Bosch—GoMechanic isn’t building from scratch. It brings in local partners based on three parameters—size of the workshop, skill level of mechanics, and the spare parts network.
The average GoMechanic workshop has around four-to-five bays with adequate infrastructure, and the space to expand to two-wheelers—these have a 50:50 authorised to unauthorised servicing ratio, as per GoMechanic’s spokesperson—if the company wants to. A bay is a platform that can be raised and lowered, on which a vehicle is repaired. For now, GoMechanic has struck up an exclusive service network partnership with Revolt Intellicorp, an electric two-wheeler manufacturer.
But GoMechanic is walking straight into the dying embers of another company. A company that tried to pull off a similar feat and didn’t make it through.
Carnation Auto, a chain of aftermarket multi-brand car workshops, went through multiple pivots, from used-car sales to selling car insurances. In 2017, nine years after its inception, Carnation went bankrupt after raising around Rs 200 crore ($28 million) in debt, and burning straight through the cash. (We’ve written about Carnation before.)
“I think Carnation was a brilliant idea and a pioneer in our domain,” says Mohan of Pitstop. “A lot of things that exist today—us, GoMechanic, other startups—is because they saw some of the teething issues.”
Essentially, had Carnation not taken the fall, perhaps a GoMechanic wouldn’t have come up.