Mahindra First Choice Wheels Ltd. (MFCWL), India’s No. 1 multi-brand used vehicle company, has signed a definitive agreement to raise $15 million (Rs. 94 Crores) from San Francisco based investment advisor firm, Valiant Capital for a minority stake in the company. This is the second round of external private equity raised by MFCWL, with the first one in 2008 from Delhi based Phi Capital, who continues to be an investor in the company.
MFCWL has experienced rapid growth in its retail, wholesale and technology enabled
businesses. The capital will be used to fund its growth plans over the next few years.
Founded by Mr. Anand Mahindra, MFCWL’s mission is to “organize” every facet of the used car industry and most important of all provide the used car consumer with a choice of certified pre-owned vehicles and a purchase experience that mimics the new car buying experience. “MFCWL is yet another example of innovation and entrepreneurship within the Group, where new business models are being explored and implemented with persistence. It is exciting to see marquee investors attracted to MFCWL and participating in its growth story where much is yet to come!” said Mr. Anand Mahindra, Chairman & Managing Director, Mahindra & Mahindra and also the Chairman of Mahindra First Choice Wheels.
MFCWL is the only true used car business with a successful “hybrid” business model bridging the consumer experience online and on the ground. With the physical presence critical to the used car business, the company has invested aggressively to provide consumers with a consistent omnichannel experience. Commenting on this strategy, Mr. Rajeev Dubey, President (Group HR, Corporate Services and After-Market) & Member of the Group Executive Board, Mahindra & Mahindra Ltd. said, “We believe the “brick + click” ecosystem is very powerful in the used car business and over the years we have seen our consumers and dealers appreciate this value proposition. We will continue to invest in the overall growth of the hybrid model in the years to come”.
To enable the hybrid used car ecosystem, MFCWL has launched several technology enabled products and services to address the key drivers of trust deficit in a used car transaction namely – vehicle condition, paperwork, pricing and experience. “Consumers are looking for more tools and insight related to used vehicles. We are leveraging our deep wholesale and retail experience on the ground to launch a slew of technology enabled products that will materially increase the confidence with which they can transact on used vehicles – whether buying or selling”, said Dr. Nagendra Palle, CEO & Managing Director of MFCWL. He added, “We have had a very successful partnership with Phi Capital over the years and we welcome Valiant Capital as a new partner to support us in our endeavour to become a world class used car company.”
The company plans to use the fresh funds infusion to accelerate its growth both of the physical network as well as adoption of its technology enabled products and services used by all stakeholders in the industry – NBFCs, Banks, OEMs, Dealers and Consumers. MFCWL is planning to end this fiscal year (2015) with 500 franchise outlets and grow to 1,800+ outlets in the next 5 years. In addition, it plans to use the funds to broaden its reach for its products and services across other used vehicle categories. In Fiscal Year Ending 2015, MFCWL used vehicle volumes sold will be 140,000 between its retail and wholesale and it will complete 140,000 Autoinspekt inspections,
The used car market, with an estimated size of 3.2 million units, is already larger than the new car market and is growing faster than the new car market. The current slowdown notwithstanding, it is expected that the used car market will become almost double the size of the new car market in the next 5 years.
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%2B%26%2BMember%2Bof%2Bthe%2BGroup%2BExecutive%2BBoard%2C%2BMahindra%2B%26%2BMahindra%2BLtd.%2C%2BDr.%2BNagendra%2BPalle%2C%2BCEO%2B%26%2BMD%2C%2BMahindra%2BFi.jpg "Mahindra First Choice Wheels raises $15 Million")