This startup provides extended warranty for used cars, raises $1 million in seed funding

Wisedrive, a car extended warranty marketplace, has raised seed funding headed by LC Nueva Investment Partners (AIF). Spiral Ventures, an Asia-focused Japanese VC fund, Bhavadeep Reddy, angel investor and HousingMan.com co-founder, and others participated in the round. The business will utilise the funding to partner with used vehicle dealers and authorised repair centres to help customers maintain their cars and develop warranty tech to build trust in the used car sector.

Wisedrive's extended warranty includes free maintenance of used cars at manufacturer-authorized service centres and PAN India Road Side Assistance to reduce engine and gearbox problems. So, clients can trust offline auto sellers and used car dealers can finalise deals 60% faster, the startup stated.

Kalyandhar Vinukonda, the founder and CEO of Wisedrive, said that in the past ten years India has witnessed a revolution in the discovery of used cars, but the next ten years will see a revolution in the building of trust in used cars.

"Because there is a lack of transparency in the service history and the usage of the vehicle, the trust level of the buyer of a used car is significantly lower. Despite this, India sells 6 million used cars every year, a number that is growing at a compound annual growth rate (CAGR) of 15% year over year. There is a lack of trust, and we want to make up for it by establishing a relationship of trust with our customers," Vinukonda said.

Extended Warranty is a worldwide accepted financial product with more than 95% acceptance in the US, Europe and other parts of the world as it ensures trust and transparency in the used car industry.

Wisedrive’s Extended warranty covers both the engine and the transmission (manual and automatic), and is currently exploring more components to add to its product roadmap. In addition to that, it offers free PAN India RSA to all of its warranty holders.

Ashish Chand, founding partner of LC Nueva, said that the country's used car market saw an increase in organised and partially organised sales. About 4.4 million used cars were sold in FY20, compared to 2.8 million new passenger cars.

"The Indian market, which is sensitive to price and mileage, should see an increase in demand," he said.

Sujit Kunte, head of India, Spiral Ventures, said that Wisedrive’s pioneering extended warranty product solves the fundamental issue of trust in the purchase of used cars. 

Wisedrive currently has partnered with authorised service centres of brands like Honda, Hyundai, Maruti, Volkswagen, Skoda, Mahindra Tata and Toyota. It will soon be directly partnered with OEMs, which will give it exposure across the country. The company now operates in Bengaluru, but over the next 12–18 months it plans to expand operations to other metro areas.