B'luru Friends Start 2-wheeler Automobile Startup, Earn ₹10Cr Per Year

Working in the automobile industry for about a decade, two friends, Venkatesh B M  and Lokesh S, observed a gap in the 2-wheeler automobile industry. They found that 2-wheeler bike users usually don't visit authorized service centers for servicing and other repair work.

Because of two reasons: One is that the cost is relatively high in authorized centers compared to unauthorized service centers. Second is that the authorized centers are mostly not available in their proximity. 

Both Venkatesh and Lokesh belong to humble families. While Venkatesh's father, who was an auto-rickshaw driver, went on to become a businessman, earning to survive, Lokesh's father was a farmer, earning to get by.

Life until 12th grade was stable as they lived in their respective villages, where expenses were relatively low. However, financial struggles began to arise when they moved to Bangalore for further education. 

"We struggled a lot when we moved to Bangalore. We had to look for scholarships for further education," recollected Venkatesh while speaking to Startup Pedia. 

Life Before VOC Automotive

The co-founders of  VOC Automotive met in Sri Jayachamarajendra Polytechnic College (SJP), Bangalore while pursuing Engineering in Automobile. Since then, being good friends, they have been in touch despite working in different cities but in the same companies. 

They both worked at  India Yamaha Motor Pvt Ltd and then Honda Motorcycle & Scooter India Pvt. While working with Honda Motorcycle & Scooter India Pvt. as Area Managers they realized their business acumen and understanding of the market, leading them to venture into entrepreneurship together. 

The Bangalore-based entrepreneurs found a market gap and wanted to bridge it. Hence, in October 2019, they launched their automobile startup called VOC Automotive in Bangalore.

Narrating the entrepreneurial journey with Startup Pedia, Venkatesh said, "We both were doing great in our careers, earning handsome salaries. However, when we found a market gap, we were so passionate that we decided to embark on entrepreneurship." 

VOC Automotive In Detail

VOC Automotive is a one-stop solution for multi-brand 2-wheeler service and repair. They provide multiple services such as general service, major service, paid services, minor service, accidental services, painting & denting, teflon & silencer coating.

The startup provides services at 30% lower charges than others without compromising quality. Moreover, it is also solving the problem of proximity by increasing the number of outlets and doorstep services, offering privileged membership so that customers can reduce their costs by more than 30%.

In a groundbreaking move in the industry, they offer a warranty: six months if the engine oil is replaced and two years for any off-engine work, full engine work, or major services. This warranty applies to vehicles starting from 2015. This is happening for the first time in the 2-wheeler industry.

The startup has an app, VOC Smart Rider for Customer, where people can book any desired service, and it will be done either at the doorstep or at the nearby VOC Automotive center.

The startup is also solving the proximity problem by Aggregating hyperlocal authorized and unauthorized 2-wheeler automobile service centers through Smart Dealer App. 

COVID-19 Challenge

Since they had a problem-solving startup plan, they managed to raise Rs. 3 crore as pre-revenue funding to start their business. With the business launching in October 2019 with setting up an office. They were working on launching an outlet when the COVID-19 pandemic hit in March 2020.

That was challenging for them. "We had investors' money that we were burning for about 50 employees' salaries and office space. It was challenging, but we were positive things would fall into place soon," said Venkatesh.

Growth of VOC Automotive

In August 2020, they managed to launch the first VOC Automotive outlet in Bangalore. Since then, there has been no looking back. 

The Bangalore-based automobile startup operated solely through a single outlet during its inaugural year. Subsequently, its expansion was remarkable. By the second year, it had 6 outlets, followed by 10 in the third year, 12 in the fourth year, and a remarkable 71 outlets by the fifth year.

"It was like a sort of Chinese bamboo story. The number of outlets increased 7x in the fifth year of our business. It is because our existing outlets have been showing continuous profitability and hence, franchisees believed in us and came forward to own our franchises. Many of our franchisees have multiple franchises," Venkatesh told Startup Pedia. 

He further added that, currently, there are 107 outlets. Most of the outlets are in Bangalore, Hyderabad, Karnataka , Telangana, Andhra Pradesh, and other cities across South India. Except for one, all the other outlets are franchises.

Talking about the success stories of VOC Automotive franchises, Venkatesh narrated that a franchisee in Karnataka’s  Chikkaballapur district makes Rs. 2.5 lakh in profit monthly.  

Regarding the franchisee model, the total investment required for a franchise is approximately Rs. 25 lakhs. The return on investment (ROI) is expected within two years, with operational break-even achievable in six months. 

As the number of outlets increased, the number of customers also grew gradually. In the second year, there were 5000 vehicles served; in the third year, it served 20,000 vehicles; and in the fourth and fifth years, the Bangalore-based automobile startup managed to serve 3 lakh customers across all their outlets.

Financial Growth of VOC Automotive

With this, the startup's revenue has also been growing exponentially. While there was no business in the first two financial years of launching the business, in the third year, which is FY-22, it made Rs. 2 lahks in revenue; in the 4th year (FY-23), it did Rs. 2.7 crores, and in the 5th year (FY-24), it clocked Rs. 10 crores in revenue.

Until now, they have raised Rs. 9 crore in total funding. Of this, Rs. 3 crore was secured as pre-revenue funding. Following that, they obtained investment from family and friends. Moreover, CWI ( Corporate warranty India Pvt Ltd ) which has been in the industry for 25 years and has presence in 5 countries also backed the startup. Currently, the startup is valued at Rs. 103 crore. 

During the interview with Startup Pedia, Venkatesh shed light on the financial growth of the startup and said, "In FY-25, we are targeting to clock Rs. 100 crore in revenue as we have a rigorous plan for expansion across India." The startup became profitable last year and currently has 20% EBITDA. 

The Plan Ahead

While elaborating on the expansion plan, Venkatesh said that there will be 300 outlets across India, venturing into the north and west parts of India soon. The automobile startup aims to serve 1.88 lakh vehicles in the current financial year.

The startup is on a spree of collaboration to provide top notch services. Such as Collaboration with Insurance companies for accidental claims , EV companies for Service Partnering , Petrol (fuel) Pumps and OEM companies. 

VOC Smart Rider App, which was launched just a year ago, aims to onboard 4 lakh customers in the current financial year. VOC Smart Dealer will function as a hyperlocal aggregator for two-wheeler customers, allowing them to select their preferred service centers.

The automobile startup also plans to launch a vertical where customers can buy and sell pre-owned 2-wheelers through the app. 

With the aim of creating employment, the startup will soon launch an academy, VOC Technical Academy - VTA, to train and employ 2500 people who are 10th pass or fail. "We are doing this to create employment across India," said Venkatesh.