We are planning to have 75 to 80 outlets by the end of 2018: Namit Jain
In conversation with Namit Jain, Founder & CEO, ONN Bikes, who spoke about the bike rental industry and how his brand is planning to grow in the future.BY Sunil Pol | February 23, 2018 | comments ( 0 ) |
Banglore based ONN Bikes, one of the few startups in rental bike space, has been growing exponentially. The company is rapidly venturing into new cities with creating its niche in the key metros to tier II and III markets. Along with strengthening its presence in B2B and B2C segments, the company is strategising to venture into another 10 key locations while increasing the total number of outlets from 45 to 75-80 by the end of 2018. Further it is looking at experimenting with electric vehicles amid eyeing a revenue target of Rs 30 crore by the end of current fiscal year 2018-19. Thus, while chalking out companies future plans Namit Jain, Founder & CEO, ONN Bikes spoke to Indianretailer.com
What are the factors driving the demand for bikes on rent in India?
The bike on rent model is a fairly new concept in India, except for Goa market, but that too is highly unorganized. The factors driving demand for this segment are:
Tourism Industry: Growth in the tourism industry is a major reason for the rise in demand for bikes on rent in India. 84 tourist destinations have been recognized by Incredible India and that provides huge growth potential for our segment, considering that over 30 thousand rental bikes run successfully in a small state like Goa.
Metro Mobilization: Migration to metro for employment from Tier 2 and Tier 3 cities provide another huge opportunity for the bike on rent segment. Multiple factors like High Cost of bike ownership, maintenance cost, credit worthiness for vehicle loans and proper documents for loan application pose huge detriments for young employees or students.
Last Mile Delivery: Exponential growth of companies providing last mile logistics due to the rise in ecommerce has resulted in huge job creation opportunities in this space. Low income range for this segment results in challenges to own a bike, which is a pre-requisite for this job segment.
Bike Taxis: Introduction of Bike Taxis in India that provides convenience and savings in terms of cost and time compared to other existing models.
In the span of two years what strategies have helped you to leapfrog faster?
We have formed strong operational presence across the B2B and B2C segments. In terms of B2B market ONN Bikes is the only company to explore the long term leasing of vehicles to business houses. This helped us generate consistent revenues with negligible cash burn. Also we have created a P2P bike sharing platform so that supply of bikes is never a problem. Apart from this exploring tourist destinations and tier 2 cities has been one of the major factors. Tourist destinations like Jaipur, Udaipur and Mysore are successful cities when it comes to bike rental market for ONN Bikes.
The B2C vertical has a strong and consistent demand and contributes nearly 70 percent of our revenue. In terms of numbers annually we cater to the demand of 1.5 lakh bikes in B2B and 2.5 lakh bikes in B2C segment respectively.
What is your current strength of bikes and the market presence?
At present, we have an inventory of over 2500 bikes. ONN Bikes has strong presence across Bangalore, Hyderabad, Jaipur, Mysore, Udaipur and Delhi NCR with 45 outlets and to soon foray into another 10 locations while taking our total number of outlets to 75 to 80 and inventory of 6000 bikes by the end of 2018.
Will future outlets be company owned or franchise run?
ONN Bikes has 4 franchisee partners that have been running successfully for the last one year. Going ahead, all outlets of ONN Bikes will be operated through franchisees which will require having an average area of 1500 sq. ft. and an investment of Rs 5 lakh.
What is the last round of funding you have raised and what will be the future move?
ONN Bikes has received three rounds of funding till date. We received the angel round funds from Z Nation Labs amounting $1lakh which was followed by an undisclosed amount as seed funding by Grace Venture Capital. In our recent round of funding, ONN Bikes received a total of INR 4.5 crore as Pre-Series A that was led by Z Nation Labs, Venture Catalysts and JITO Angel Network. We have plans to raise series-A funds post utilization of our existing funds.
How technology is playing a pivotal role of enabler in your space?
Technology has been instrumental in organising and scaling up the unorganized Bike rental sector. Apart from this, Technology also provides a host of services like security features in which high tech security features on the vehicles like live GPs monitoring, Immobilizers, fuel monitoring systems etc help keep the operational security challenges at bay. The e-booking is the three step booking procedure is the simplest way to book a bike via application or website. And finally the route mapping, fuel tracking and idle time management are advanced technology features helping our B2B clients optimize their last mile delivery operations.
What is your future investment plan and revenue target?
At ONN Bikes, we are looking at experimenting with electric vehicles and will soon announce our plans regarding them. We have a revenue target of INR 30 crore in financial year 2018-19.
According to you how big is the self-riding bike industry in India. What is your CAGR?
The self riding bike rental market is in its nascent stage in India, but has witnessed steady growth since inception. We believe that the size of self-ride bike rental industry in India is about $ 6Bn with a CAGR of nearly 30 percent.
24 Nov 2015, Hotel Pullman, Aerocity, New Delhi.
Attend First global conference & master class on franchising.
GROW YOUR BRAND FRANCHISE >> REGISTER NOW!