MFCWL or Mahindra First Choice Wheels Limited, a part of the $19 billion Mahindra Group, has raised approximately Rs. 100 crore or $15 million in a new funding round from Valiant Capital which is a hedge fund based in Silicon Valley and Cox Automotive. The investment will be used as primary capital for funding the growth and expansion of the company over the next 18 months or so. The valuation of the company has now gone up to $265 million from $250 million previously. Primary capital had last been raised in March 2015 by the company.
Mahindra First Choice Wheels Limited claims to have achieved the fastest rate of growth amongst providers of automotive products and services over a period of 5 years. Monthly growth rates have touched almost 3.5% during this period. Revenues have also increased by a whopping 8 times over the same duration. According to the Chairman at Mahindra & Mahindra, Anand Mahindra, MFCWL was founded on the principles of entrepreneurship and innovation and is one of the Mahindra Group’s fastest growing divisions. He added that this is a testament to the stellar performance of the company and also the ability of the Mahindra Group to create and nourish such ventures while ensuring value for shareholders.
The company already has a network of 1, 650 franchise dealerships across 800 towns. It is betting big on digital platforms in terms of Pricing & Analytics (IndianBlueBook), Inspections (Autoinspekt) and Used Vehicle Auctions (eDiig). The company has also launched Yard Management Solution or YMS recently which is a remote management offering for inventory. This is an inventory platform with close to 600 yards being managed at present.
According to the President & CEO (after-market sector) at Mahindra & Mahindra, Rajeev Dubey, the main goal for MFCWL is the organization of the used vehicle ecosystem. There is total transparency offered through MFCWL services and products across all parts of the ecosystem from both wholesale and retail dimensions according to him. He added that this is the only company which is operating through a hybrid model, i.e. it is present both in the cloud and also on the ground. This unique strategy is the core element of its mission according to Dubey.
The CEO & Managing Director at Mahindra First Choice Wheels Limited, Dr.Nagendra Palle, stated that this primary capital infusion into the company is exciting. The company planned to have 1, 800 dealerships by 2020 back in March 2015. However, this has been accomplished in 2018 itself. With the rationalization of GST rates, Palle stated that the company wishes to leverage its vast technological expertise for coming up with cutting-edge wholesale and retail solutions. The next target is to have a network of 5, 000 dealerships over the next 5 years. The investment will be used for expanding the franchise dealer network and also for investments in newer tech-enabled services and products for customers online.