Bike Bazaar Secures INR 25 Cr Debt Financing from MAS Financial

In a significant development for the online two-wheeler marketplace and financing platform, Bike Bazaar has successfully raised a debt of INR 25 Cr (approximately $3 Mn) from financial services company MAS Financial. This funding move is set to bolster the company's operations and growth prospects amidst a challenging economic landscape.

According to Registrar of Companies (RoC) filings accessed by Inc42, Bike Bazaar's board approved a special resolution to issue 2,500 non-convertible debentures (NCDs) to MAS Financial, each valued at INR 1 Lakh. The debt, raised at an interest rate of 10.7% per annum for a tenure of 30 months, signifies the company's strategic financial planning to ensure sustained growth and operational stability.

Founded in 2017 by Srinivas Kantheti and Karunakaran Vadakkepat, Bike Bazaar operates a comprehensive online marketplace for buying and selling pre-owned two-wheelers. In addition to facilitating transactions, the platform also offers loans for purchasing new and used two-wheelers, expanding its reach and services in the market. Furthermore, Bike Bazaar provides loans for electric three-wheelers and electric bikes on rentals, catering to the evolving needs of eco-conscious consumers.

Bike Bazaar's latest debt raise follows a successful $30 Mn Series D funding round last year, with investments from prominent entities such as DEG, Women World’s Banking Asset Management (WAM), Elevar Equity, and Faering Capital. Since its inception, the startup has garnered over $101 Mn in funding, demonstrating strong investor confidence in its business model and growth potential.

The startup boasts an extensive network, with touch points spanning 100 locations across India. To date, Bike Bazaar has disbursed loans worth INR 3,400 Cr to approximately 64 Lakh customers, underlining its significant impact on the two-wheeler financing market.

Bike Bazaar has made notable strides in improving its financial health. The company reduced its net loss by 21%, bringing it down to INR 43 Cr in the fiscal year ended March 2023 (FY23) from INR 55 Cr in FY22. Additionally, its revenue from operations increased by 20% year-on-year (YoY) to INR 180 Cr in FY23, showcasing its robust operational growth and efficient cost management.

Bike Bazaar's debt raise is part of a broader trend of Indian startups turning to debt financing amidst a funding winter and challenging macroeconomic conditions. Other startups, including logistics startup Ripplr and edtech unicorn upGrad, have also secured significant debt financing recently. In June, NBFC Northern Arc Capital raised $75 Mn in debt from Dutch entrepreneurial development bank FMO, while omnichannel jewellery brand Bluestone secured INR 100 Cr in debt from Neo Markets.

The INR 25 Cr debt raise from MAS Financial is a strategic move for Bike Bazaar, positioning it for continued growth and resilience in a competitive market. By leveraging this funding, Bike Bazaar aims to enhance its services, expand its market presence, and further solidify its position as a leading player in the two-wheeler financing industry. As the startup ecosystem navigates through economic uncertainties, Bike Bazaar’s proactive financial strategies serve as a testament to its commitment to long-term success.