India’s Spinny lines up $160M funding to acquire GoMechanic, sources say

Spinny, an Indian online used car marketplace, is in the process of raising approximately $160 million as part of its strategy to acquire GoMechanic, a startup specializing in car services. This funding round, identified as Series G, comprises both primary and secondary transactions, and is expected to value Spinny at around $1.8 billion post-money, according to sources familiar with the developments. Of the total amount being raised, nearly $90 million is designated as primary funding. Notably, existing investor Accel has already contributed about $44 million, with some details of this investment emerging in regulatory filings in India. Although a new investor will partake in the remaining primary funding, specifics remain unconfirmed. WestBridge Capital is also participating again, matching its previous investment size with a similar amount. In addition to Accel, the secondary component of the funding is largely being sold by Indian venture capital firm Fundamentum, with Blume Ventures also expected to reduce its stake. Requests for comments from Accel, Fundamentum, and Blume Ventures went unanswered, while WestBridge Capital opted not to comment. Earlier this year, Spinny raised $131 million in the initial phase of its Series F round, which was later expanded to about $170 million by including WestBridge Capital. The funds raised were intended to scale Spinny’s core operations in the used-car market. However, the current funding round is specifically aimed at financing the GoMechanic acquisition and enhancing its platform without utilizing existing cash reserves. Reports indicate that Spinny plans to acquire GoMechanic for about ₹4.5 billion (approximately $49.7 million) through a cash-and-stock arrangement. This acquisition follows a tumultuous period for GoMechanic, which was acquired by a consortium led by Lifelong Group after the startup acknowledged significant inaccuracies in its financial reporting. For Spinny, this acquisition represents a strategic maneuver to strengthen its position across the used car value chain. Operating out of Gurugram, Spinny has established a substantial consumer-facing business, selling approximately 13,000 used cars monthly, primarily to individual buyers, while also catering to dealers via its auction platform. The startup operates extensive reconditioning centers to refurbish cars before sale and relies on third-party service shops for after-sales services—an area that GoMechanic could potentially enhance. Furthermore, GoMechanic could serve as a dual-purpose channel for Spinny, providing servicing for vehicles bought or sold through its platform while attracting car owners who are not yet customers. This synergy could facilitate an increase in Spinny's vehicle supply without significantly escalating customer acquisition costs. The acquisition is timely, as the Indian used car market is projected to expand at a compound annual growth rate of approximately 10%, reaching nearly 9.5 million units by 2030 from about 6 million units today, according to a recent report by Mahindra First Choice and Volkswagen Pre-owned Certified. This deal further solidifies Spinny’s efforts to broaden its presence within India’s automotive sector, following its recent acquisitions of auto publications and the launch of Spinny Capital, a non-banking finance company aimed at providing vehicle loans to customers. Spinny's co-founder and CEO, Niraj Singh, did not provide a comment on these developments.