Wisedrive, a car extended warranty platform has raised $1 million in its seed funding round from LC Nueva Investment Partners.
The round also saw participation from Japanese VC fund Spiral Ventures, housingman.com founder Bhavadeep Reddy, and others.
The startup plans to use the funds to expand its reach by forming more partnerships with used car dealerships across the country. It also plans to target this market by claiming that 96 percent of used cars purchased in the country are catered for through third-party sellers.
The Bengaluru-based Wisedrive was founded in 2021 by Kalyandhar Vinukonda, It provides extended warranties to older cars, and its extended warranty program combines engine and transmission warranties with service and maintenance (only at a manufacturer-authorized service center) and roadside assistance.
“The trust factor is still shaky when it comes to the used car space. The last ten years in India have witnessed a revolution in the discovery of used cars, but the next ten years will see a revolution in the building of trust in used cars. Because there is a lack of transparency in the service history and the usage of the vehicle, the trust levels of the buyer of a used car are significantly lower. Despite this, India sells 6 million used cars every year, a number that is growing at a compound annual growth rate (CAGR) of 15% year over year. There is a lack of trust, and we want to make up for it by establishing a relationship of trust with our customers. Thus we have partnered with offline service stations to provide customers with a streamlined experience and process whenever they bring their vehicles in for repairs or maintenance”, said, Kalyandhar Vinukonda, founder and CEO of Wisedrive.
The startup has partnered with authorized service centers of brands like Honda, Hyundai, Maruti, Volkswagen, Skoda, Mahindra Tata and Toyota. It is currently operating in Bangalore but plans to expand to all metros in the next 12-18 months.
“The market will expand as more people choose independent mobility and as used car financing options increase. Buyers are looking for alternatives to new cars due to tighter cash flow, and the used car market has significant growth potential. The used car market is expanding as the pandemic slows new car production and sales. However, the country’s used car market saw an increase in organised and partially organised sales. 4.4 million used cars were sold in FY2020, compared to 2.8 million new passenger cars. The Indian market, which is sensitive to price and mileage, should see an increase in demand. Going forward, we anticipate a significant increase in demand for the extended warranty that Wisedrive currently offers for this market segment”, said, Ashish Chand, Founding Partner of LC Nueva.
Sujit Kunte, Head of India, Spiral Ventures commented, “Wisedrive’s extended warranty product solves the fundamental issue of trust in the purchase of used cars. We are excited to see the team, with entrepreneurial experience in tech x automotive sector, develop a data-driven approach to better price the warranty and manage risk.”
Wisedrive provides extended warranty to used cars. Their products are Made In India, Made For India. Their extended warranty program combines Engine and Transmission warranty with Service and maintenance (Only at Manufacturer Authorised Service Centre) and Roadside Assistance.