Set up in 2020, Sheerdrive is a digital AI/ML pre-owned vehicle platform that deals with all the key elements required to run an effective used vehicle program. The company showcased its products and services at the recently concluded Bharat Mobility Show 2024 in New Delhi. Starting with a small team in 2020, Sheerdrive currently has a total of around 170 employees spread across the country.
For Ravi Mehra, CEO and Founder, Sheerdrive, it has been a long but challenging journey. He spent more than 18 years in the digital auto space, both in India and overseas. His first stint was with eBay Motors, in the business of auctioning off used vehicles, followed by a 10-year stint at Cartrade. Since then, there has been no looking back for Mehra.
“I took up an assignment for a Swiss firm in Cape Town dealing in second-hand cars in Africa. I came back due to Covid. When I returned to India, I realised there was a huge gap in the supply chain here. The organised share of the used vehicle market, which was 18 per cent, had managed to move to only 20-23 per cent,” recalls Mehra.
A significant portion of the pre-owned or used car vehicle space, typically managed by new car dealerships through exchanges, was unorganised. Keeping this in mind, Mehra discovered that the best approach to this was to create technological tools and approach new car dealerships to establish efficient used car operations. Mehra seized this business opportunity and it was an instant success with car dealers. That›s how Sheerdrive came into existence.
In October 2020, Sheerdrive commenced operations. “We were fortunate to create a product and present it to one of India’s largest new car dealership chains, Group Landmark, led by Sanjay Thakkar, which operates multiple brands. They were highly impressed with the product and were prepared to invest in Sheerdrive. Consequently, we accepted seed capital of R5 crore,” explains Mehra. With his personal investment of R1 crore and Landmark’s R5 crore, Sheerdrive was fully prepared for action. Over the past 3 years, it has acquired close to 30,000 vehicles and sold them. Achieving approximately R750 crore in sales within a short timeframe has instilled confidence in the business.
To speed up the evaluation process, Sheerdrive decided to build a product capable of evaluating a car, providing a repair estimate, and offering a price – all within 15 minutes. As a result the company started investing significantly in AI and machine learning, integrating service history into its program. Sheerdrive succeeded in developing a product capable of evaluating a car in less than 15 minutes. Currently, Sheerdrive works with 120-odd new car dealerships across India. Its operations are spread across Madhya Pradesh, Gujarat, Delhi, Rajasthan, and Maharashtra.
Road ahead
Currently, the company is engaged with approximately 110 new car dealerships and 9,000 used car dealers. These 9,000 used vehicle dealers subscribe to some of the company’s products and also purchase vehicles from auctions. The objective is to increase the number of new car dealerships from the current 110 to nearly 550 by the end of the next fiscal year. Additionally, the company aims to double the number of used vehicle dealers to 18,000. Sheerdrive generates revenue from subscription packages, profits on car sales, transaction fees, and income from auction sales. The company’s business model has transitioned from a capital-intensive business to a software-selling business.
In developed economies, 25 per cent of a new car dealership’s profits come from pre-owned cars. In India, this figure stands at only 3 per cent. Given the evolving landscape of new car models in the market, new car dealerships will need another source of revenue. Sheerdrive is ready to capitalise on this opportunity.
“Our vision would be that at least 40 per cent of new car dealers use our products and another 40 per cent of used car dealers also engage with our products. And I think that will unlock value for the end customer who’s selling and upgrading the car,” concludes a confident Mehra.
S M BOOTHEM
feedback@businessindiagroup.com