Spinny raises $160M funding to acquire GoMechanic
What's the story
Spinny, an Indian online platform for pre-owned cars, is in the process of raising some $160 million. The funding round will help the company acquire car services start-up GoMechanic. The Series G round, which includes a mix of primary and secondary transactions, would value Spinny at about $1.8 billion post-money.
Investment details
Funding breakdown and valuation
The upcoming funding round will see nearly $90 million as primary investment. Existing investor Accel has already invested around $44 million of that amount. A new investor is also joining the primary investment, but their identity remains unconfirmed. WestBridge Capital is investing a similar amount to its previous investment in Spinny's Series F round earlier this year.
Stake adjustments
Secondary transactions and stake sales
The secondary part of the deal is mostly being sold by Indian VC firm Fundamentum, with Blume Ventures also expected to reduce its stake. This round of funding is specifically being raised for GoMechanic's acquisition and investment in its platform, without touching the start-up's existing cash reserves. Reports have suggested that Spinny could acquire GoMechanic for roughly $50 million in a cash-and-stock deal.
Market growth
GoMechanic's acquisition and Spinny's expansion
In 2023, a consortium led by Lifelong Group acquired GoMechanic after the start-up admitted to "grave errors" in its financial reporting. The acquisition would give Spinny more control over the used-car value chain. It already sells around 13,000 used cars a month directly to buyers and dealers through its auction platform. The Gurugram-based start-up also runs large reconditioning centers for refurbishing vehicles before sale and uses third-party service shops for after-sales servicing of customer cars.
Strategic advantage
GoMechanic as a '2-way' funnel for Spinny
The acquisition of GoMechanic would also serve as a "two-way" funnel for Spinny. The platform would service vehicles bought or sold through Spinny and attract car owners who may not yet be customers. This could expand Spinny's vehicle supply without significantly increasing customer acquisition costs, giving it an edge in India's growing used-car market.