Tarun Lawadia, founder of the Gurgaon-based startup, told ET that he hopes to raise the amount through debt and equity in the next six months, and based on the business performance, he may consider raising another $25 million ( Rs 188 crore) to reach the company’s target of 25,000 cars and as many customers in three years.
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PumPumPum operates a fleet of 120 cars in the National Capital Region with assets worth Rs 6 crore.
The company had raised Rs 5.5 crore from Inflection Point Ventures earlier this month in pre-series funding, which Lawadia said will be used to expand the fleet to about 800 cars and possibly add new locations, like Benglauru.
“As against used vehicle acquisition, wherein a customer has to pay higher interest rates in financing a vehicle, leasing can offer a better value,” said Lawadia. “The idea is to solve the problem of customers.”
PumPumPum had started operations with used luxury cars a few years ago and then changed course to become a used-car leasing business.
In India, the used-car leasing space is untapped. Global leasing players like Leaseplan and ALD Automotive have set up bases in India but they are only into leasing new vehicles.
Lawadia claims his platform offers better value to customers due to the integration of technology, data and AI, and the fact that the company owns the assets.
In India, the used-car market is 1.6 times the size of the new-car market and is growing at a compounded annual growth rate of 15-16%.
Lawadia said leasing solutions like the one offered by PumPumPum can help finance companies increase penetration to 50% from just 15% at present.
The company will eventually add electric vehicles to its fleet, Lawadia said.