Hyderabad-based multi-brand service company CarZ, which had raised $5 million from Indo-US Venture Partners in 2011, now aims to raise another round of funding.
Founded in 2008 with the personal capital of auto experts Vijay Gummadi and Venu Donnepudi, along with funds from a few well-wishers, the firm has been growing at a steady pace. This meant a continuous need of funds for the company.
"We intend to achieve 100 outlets in the next three years. We are in the process of our next fund raise of $5 million to fund expansion," said Gummadi, co-founder of CarZ.
Having launched its first outlet in Hyderabad in 2010, CarZ now operates 15 independent multi-brand car service centres across 12 cities in Andhra Pradesh, Karnataka, Tamil Nadu and Kerala. The company is raising money at a time when other players in multi-brand car service are struggling to deliver.
"This is affecting the perception of the sector as a whole and has made investors and other stakeholders bearish," said Gummadi, adding "As such, we see there's abundance of capital waiting to be invested in good opportunities."
In the past three years, CarZ has fine-tuned the operating model significantly.
CarZ claims it pioneered the concept of small workshops when others were building massive workshops.
Now, there is realisation across the industry that small workshops work better.
"Just building small workshops or shrinking the size isn't enough. Alignment in systems, process, technology, mindset and people is required for success. That's where we have an edge," added Gummadi. "To keep it really simple, we have focused on our costs. It's a mindset that has to be woven into the fabric from the early stages."
The Automotive Component Manufacturers Association of India has estimated that by 2017, the marketshare of multibrand, organised centres will grow 5-10 per cent from the current 1-2 per cent. "That's a sizable market share to be developed collectively by all the players given each one's competency in a particular region," said Gummadi.
