CarDekho’s Rupyy expands horizon: To finance used commercial vehicles in FY25

“We will be launching a new product line for commercial vehicle financing, effective quarter one of next financial year,” said Namit Jain, founder & CEO Rupyy told Mint.

The company currently provides loans for car financing and operates in used passenger vehicles, new cars and electric vehicles categories.

The market for used commercial vehicles, including light commercial vehicles like Bolero, pickup trucks, and Tata Ace, is significantly large—twice the size of the used passenger car market in India, Jain said. The used car financing market in India today is close to about ₹60,000 crore, he added.

The introduction of commercial vehicle financing is expected to address a substantial market need, he said. Despite the high penetration of financing in the used commercial vehicle sector—where around 90% of transactions involve financing—Jain points out a lack of digitization and technological integration compared to the passenger vehicle segment.

Rupyy aims to implement digital solutions in this segment to streamline the loan process, mirroring their current technological interventions in the used car market, Jain said. 

Jain noted that while used car loans now take significantly less time than they did a decade ago, used commercial vehicle transactions still lag behind, often taking five to six days to complete.

“What we’ve seen in commercial, used commercial vehicles is that the degree of digitization and technology adoption is very poor… we would ideally want to introduce a lot of technology interventions that we brought in used car space and digitise this sector,” Jain said

Ruppy’s parent CarDekho, an auto-tech unicorn, recorded a revenue of ₹2,331 crore in FY23, up 46% from FY22. Its losses widened marginally to ₹562 crore in FY23 against ₹535 crore in FY22 (without adjustment of accounting gain of ₹290 crore of exceptional one-time market-to-market gain of investments in associates; if adjusted, the reported losses were ₹246 crore), it said.

The auto-tech unicorn had said it has been able to maintain a strong growth trajectory due to its growth engines like insuretech platform InsuranceDekho, and Rupyy and its Southeast Asia business.

Apart from the commercial vehicles financing venture, Jain said, the company’s focus next year will be on scaling up its lending business. “So we’ll be investing our technology and our distribution reach to start to build our assets under management for the lending business as well.”

The company, which has about 14-15% market share in the used cars segment, aims to increase it to 20% next year. Jain, however, said it’s a challenge as the company competes with a largely unorganised market. 

In the used vehicle financing landscape, Rupyy competes with the lending arms of Cars24 and Spinny, besides traditional financiers like HDFC Bank.

“In this segment, we are not really competing with any kind of organized players. We are competing with a lot of small, small-sized unorganized players and hence, it’s very difficult for any single player to have a very large market share.”

Rupyy’s strategy involves not only penetrating new markets but also developing new growth engines to sustain its expansion beyond current market share levels. “Getting into new product lines is also a function of building new growth engines for the future because once you get to 18-19% kind of market share, you can’t keep growing faster than the market. Then the market starts to compete with you also in a way,” Jain said.

Currently serving nearly four lakh customers, Rupyy expects to close FY24 with a 55-60% growth rate.

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Published: 28 Feb 2024, 01:40 PM IST