Indian startups continue to woo Chinese investors

China- the mecca for Indian startup investment

China has emerged as one of the fastest-growing sources of Foreign Direct Investment (FDI) into India – it was the 17th largest in 2016, up from the 28th rank in 2014 and 35th in 2011, according to India’s official ranking of FDI inflows.  Key beneficiaries of this trend include the Indian startups who in last one year have witnessed the gradual shift from strategic to pure financial and returns-focused investments from Chinese companies. 

Last January, Mumbai-based Truebil successfully concluded its follow-on Series-A startup investment round with an investment of $3 million from China’s leading venture Capital fund, Shunwei Capital in January this year. Formed in 2015, Truebil claims to be India's only curated, authentic and verified marketplace for pre-owned cars. Through investment made in Truebil, Shunwei Capital has made inroads into Indian market. Other startup  investment from Chinese companies include Paytm, iXigo, Flipkart and Makemytrip.

Talking to I Am An Entrepreneur, Shubh Bansal, co-founder, Truebil, said, “As we were planning to intensify our operations, roll out more consumer-centric products, invest in skill development and bolster the technological infrastructure of the company, securing funds became a pre-requisite for the company. This investment by China’s leading Venture Capital Fund Shunwei Capital will not only drive the expansion of our operations, it will also become the defining block in unprecedented business activities for Truebil. More than the funds, however, it is the strategic guidance and mentorship that Shunwei Capital brings to the table that will be pivotal for us at this stage of our growth story.”

“As Shunwei Capital was making their debut investment in the vibrant Indian startup landscape, they were looking to join hands with a venture that has a robust business model, is catering to a real consumer need and is backed by a superior team and tech infrastructure. Our venture fitted the bill perfectly and thus we managed to attract their financial assistance and mentorship,” he added.

Opening Chinese ecosystem with the help of Chinese investors is turning out to be game changer in terms of knowledge sharing, not just sourcing capital. Chinese entrepreneurs are ahead of their Indian counterparts and therefore give Indian entrepreneurs an opportunity to leverage their experiences in a huge way. Therefore, Indian founders, with big international dream are banking on Chinese investors for both learning and growth. For Chinese investors, Indian startups present a range of scope. The familiar and already tested business models and complete financial based association work for the companies. Slowing Chinese economy and paucity of investment opportunities in their own country also brings the investors to India – a country with a burgeoning startup culture.

Truebill has completed three rounds of funding till date. The company has previously raised seed fund of $500,000 from Kae Capital. It has also raised $5.5M (Rs 35 crore) in Series A funding led by Kalaari Capital, Inventus Capital and Tekton Ventures and $3M follow-on Series A from Shunwei Capital. “Truebil plans to utilize the present funding to intensify its operations in terms of reach and services across Mumbai & Bangalore, invest in skill development of the people and augment the technological infrastructure, which is one of the key components of Truebil’s success,” informed Bansal.

Incepted on 13th March 2015, Truebil is an outcome of the integration of seven thinking minds; Suraj Kalwani (CEO, IIT KGP, Ex-Housing), Ravi Chirania (Operations, IIT KGP, Ex-Housing), Shubh Bansal (Marketing, IIIT Jabalpur, Ex-Housing), Rakesh Raman (Product, IITB, Ex-Housing), Ritesh Pandey (Technology, IIIT Jabalpur, Ex- Fab.com), Shanu Vivek (Marketing, IITB, Ex- Housing) and Himanshu Singhal (Operations, IIT KGP, Ex- Rio Tinto).

It all started from a small incident wherein, one of the founders had to undergo month-long inconvenience to shortlist a car. Every weekend he used to hire a mechanic and visit the used car dealers just to ensure the vehicle's viability. It was nearly impossible for him to find a car without breaking sweat and finally, the never-ending negotiation part made him realize that the actual selling prices could actually vary up to 20-30 per cent of the asking price. This information asymmetry and the lack of authenticity gave the founders inspiration to take onus and thus, Truebil came into existence to facilitate a hassle-free car buying experience for the youth and the young families who are eyeing to buy a value-for-money car.

At Truebil, each car undergoes intensive inspection by its in-house auto engineers and carries a detailed inspection report. For every car, 40 high-quality pictures are uploaded by the company, focusing on each dent/scratch so that consumers do not have to travel to places, just to have a look. Truebil believes in ensuring a satisfied consumer experience and to make it possible, it handholds its sellers and buyers throughout the entire transaction process. Presently the company is witnessing a 20 per cent growth (MoM) with more than 3000 verified cars registered to its portal. So far, the platform has sold 2500+ cars in Mumbai only worth 87.5 Cr GMV. Currently, the sales rate in Mumbai is 125 cars per month.

The company has also introduced full stack inventory model Truebil Direct. For Truebil Direct, company maintains inventory by buying the used cars from the sellers and getting them refurbished before listing them on its marketplace. The buyers get to shortlist and buy best quality Truebil cars directly from its offline dark stores with one-year comprehensive service warranty, one-year Road side assistance, and one Free servicing. Once purchased, Truebil takes care of all the end-to-end hassles of paperwork, loan and insurance. Being a one-stop online portal for buying and selling of used automobiles, Truebil Direct offers a long list of services to its users including Free Inspection and valuation, Quick sell guarantee, Free car buying consulting, Paper Transfer, Loan, Insurance and Car Spa.

“Indians are rapidly opening up to new technologies and buying a used car online is being labelled as substantial progress in the country's automobile ecosystem. Truebil aims to make the process of buying and selling pre-owned automobiles surprisingly easy through a one-of-its-kind platform. The buyers could shortlist from a list of meticulously inspected and certified cars and avail end-to-end services on their sale/purchase. The objective is to eliminate hassle and inefficiency caused during car purchases from the used automobile ecosystem and ensure absolute transparency to the buyers,” assured Bansal.

Do you think the interest of Chinese investors in Indian startups will continue? Do share your views.