UAE-based Open Bonnet in fundraising talks, set to foray into Saudi, Oman
Auto market start-up is also in negotiations to strike increased strategic partnerships to expand into more segments like commercial vehicles and insurance related services
- (1888PressRelease) June 13, 2023 - The Open Bonnet network keeps growing in parallel and plans to expand into more segments, like commercial vehicles and insurance-related services.
UAE-based start-up Open Bonnet, a digital marketplace for auto aftermarket service providers and vehicle owners, is in talks with some of the leading institutional investors and auto market players to raise capital to fund its growth, the founder of the venture said.
The ambitious expansion plans will see the company entering more countries in the GCC and also some locations outside Asia.
“In phase one of our growth, we created strategic partnerships. But now phase two is beginning and hence fundraising is a clear financial goal,” Gaurav Sharma, founder of Open Bonnet, told Arabian Business.
“We are currently in talks with some of the investor groups such as private equities and venture capitals, and also some of the consumer product manufacturers in the industry,” Sharma revealed, without disclosing any names.
“It so happens that the automotive industry itself has a lot of players whose business goals are achieved by associating with a B2B2C (business-to-business-to-consumer) platform like Open Bonnet,” Sharma said, adding that the start-up is open to both options for its fundraising plans.
“Many such companies have offered to advance discussions around our fundraising drive and we are trying to find the right synergies with our partner for the crucial growth curve that lies ahead of us,” Sharma said.
Sharma also said, along with the fundraising plans, the start-up was simultaneously working on some more strategic partnerships to widen the offerings on the company platform.
The Open Bonnet network keeps growing in parallel and plans to expand into more segments, like commercial vehicles and insurance-related services. A few strong strategic partnerships are also in advanced discussions and they are expected to improve the value we provide to our buyers and sellers community, the start-up founder said.
“For example, we are in advanced talks with a major international spare parts manufacturer for setting up B2B and B2B2C supply chains in the region for their products. We are on track to release news of at least two more such partnerships in 2021,” Sharma revealed.
Open Bonnet has recently entered into a memorandum of understanding (MoU) with Total Marketing Middle East (TMME), a leading lubricant company in the GCC region and an affiliate of Total, a broad energy company, to bring the latter’s lube shops on its digital service platform.
Sharma also revealed that the company has of late been working closely with used car sellers and portals, enabling a strong use for inspection and repair of used cars before entering the inventory for sale.
“The auto industry also has witnessed a huge slowdown in 2020 – new car sales dropped, people were traveling less during lockdowns, so less wear and tear for existing car-parc (parking access and revenue control).
“But as things seem to be improving now, a new order is emerging in the industry – a faster rise in the sale of used cars – which also means the average age of car-parc is rising. This further implies the need for Best Car Service & Car Repairs in UAE and other aftermarket services. Hence, the challenge is slowly transforming into a huge opportunity,” Sharma said.
Industry experts said the trend of rising used car sales is going to continue in the region, leading to the emergence of several smart business models in the past year for the segment to make it as organized as the new car dealerships.
As per a recent study by Frost & Sullivan, pre-owned vehicle sales are expected to be three times that of new cars by 2025. This would result in an increase in the average age of first ownership of a car from the current level of 5-6 years in the UAE to around 8-9 years.
“An increase in the age of a car means there would be an increase in the demand for aftermarket services related to wear and tear and maintenance, providing greater business opportunities for platforms like Open Bonnet,” Sharma said.
On average, a car owner spends AED 3,500-4,500 annually on regular wear and tear and maintenance-related expenses, excluding collision repair.
As for the company’s plans to enter new markets, Sharma said that regional expansion in the near term is on the cards and very much possible within 2021.
Saudi Arabia and Oman are among the new markets Open Bonnet is planning to enter within the GCC as part of its expansion plans this year.
“Through market research and discussions with our global advisors, we have identified 5-6 countries that are poised to have a marketplace-servicing model that Open Bonnet represents. Interestingly, only two of these countries are in the [GCC] region and the rest are outside Asia,” Sharma said.
Source: https://www.arabianbusiness.com/industries/transport/466435-uae-based-open-bonnet-in-fundraising-talks-set-to-foray-into-saudi-oman
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