Why CarIQ is betting on car owners
Owning a depreciating asset such as a car requires constant maintenance. Going to a service centre means dealing with personnel who do not fully understand automobiles, and most customers tend to get cheated. This is where Sagar Apte and his team spotted an opportunity: instead of asking a service centre to diagnose a problem, why not devise a means to allow the car to do the 'talking', so to speak.
Data is the mainstay of CarIQ's product â€“ a telematics-based platform that enables car owners to track and assess their vehicle's behavior. The hardware is a dongle inserted in the car, which then reads the data in the vehicle. That data is then transmitted to CarIQ's servers, where it is processed and actionable insights are then transmitted to a user's app, indicating what needs to be done.
Telematics refers to long distance transmission of information and it is widely applied in the automobile industry particularly to remotely control and manage data in vehicles.
Since its inception in 2013, the firm has pivoted its business model a few times.
Apte, co-founder of CarIQ Technologies Pvt. Ltd, says that initially the firm wanted to offer its data technology in the used car market. It wanted to help users make better decisions through the use of its data platform.
"While most used car buyers depend on an expert opinion from a friend or local mechanic, both of whom have some of sort of a vested interest in the car, we thought we could give an impartial third party opinion," explained Sagar Apte.
However, this model failed to take off because dealers in the used car space were unwilling to provide the company access to the vehicles. So instead of car dealers, the firm then decided to focus on individual car owners because they were the ones with the most vested interest in the vehicle. To gain access to these individual car owners, the firm decided to partner with enterprises such as insurance companies. One of its major clients is Bajaj Allianz, which they took on board in December 2015.
Apte says that he wants to tap into the usage based insurance, which allows a motor insurance company to price the premiums based on the driving behavior of the car owners, "Now this brings a lot more visibility into the system, allows good drivers to be awarded for driving better and maintaining their vehicle better," claims Apte.
CarIQ differentiates itself from GPS by providing more than just location-based information. It is a cloud-based diagnostic platform that offers car owners feedback about the status of their vehicle. Not only that, but through its partnership with India Assistance, the firm even gives recommendations on which service centre a user can go to.
Angel investor Ajeet Khurana says that the data accumulated by CarIQ contain crucial information that would be of use to manufacturers, insurers, service providers, and consumers, "The B2B model that CarIQ has adopted allows them to get their tech into a large number of vehicles. At the same time, it creates a very small pool of prospective customers. I would be keen to see CarIQ land a second significant partner after Bajaj," he adds.
Several global automobile manufacturers already have data analytics as a core offering, explains Khurana. "So, on the one hand, CarIQ might be competing with its own customer, and on the other, it might present a sweet acquisition target to an automobile manufacturer that wants to hit the ground running," he explains.
CarIQ has two parts to its revenue streams: it monetizes from the sale of its hardware, which is a dongle that is inserted in the car and it also generates revenues from recurring costs gained through partnerships. The firm connects car owners who require maintenance with roadside assistance centres. "We give the technology (the hardware) to the insurance firms. They pay us a per-user fee. The other model is when we sell to consumers. They pay for the hardware and then we make additional revenues by value added services," explained Apte.
CarIQ does not tie up with specific roadside assistance centres or workshops but has partnered with India Assistance, which is part of Mapfre Asistencia, a Spanish multinational insurance and reinsurance firm. India Assistance oversees CarIQ's back-end integration and manages the last-mile delivery of value added services where the startup's users are connected with puncture shops and towing companies.
Previous funding, team and expansion plans
CarIQ received seed funding in 2012 from Pose Ventures, a Singapore-based early and seed stage fund; Snow Leopard, the VC arm of the Kirloskar Group, and CBX.
The firm launched operations in 2013 and is steered by Apte, Kumar Rajguru (director of engineering), Deepak Thomas (director of product), Hrishikesh Nene (CTO), Vinu Kanakasabhapathy (COO). Rajguru and Thomas oversee the design and development of CarIQ's product. Rajguru has previously worked as an engineer with Siemens and Indian offshore IT services firm Aftek. Thomas, who is also in charge of digital marketing at CarIQ, has had stints as a UI designer at PubMatic, a marketing automation software company for publishers, and Infosys. Kanakasabhapathy, who heads operations at CarIQ, has worked with cloud backup and data protection firm Druva, multinational software firm Red Hat and animation firm Rhythm & Hues. Nene, an IIT-Bombay alumnus, has over 21 years of experience in developing products for big data, cloud, IoT and mobile app technologies. Prior to founding CarIQ, Apte has been part of product management in firms such as PubMatic, Symantec and Ensim Corporation.
The firm is looking to expand its services to Southeast Asia and already has some proof of concepts underway. "While we are targeting insurance and OEMs in India, outside, we are talking to large workshop chains as well, which is not so prevalent in India," explained Apte.
Since it signed up with Bajaj Allianz in December 2015, the company put its B2C play on hold to focus on its enterprise segment, and it will resume the consumer operations by mid-November.
In July this year, Trak N Tell, a car tracking telematics solutions provider, secured Series A funding led by WhatsApp co-founder Brian Acton. The Gurgaon-based firm was founded in 2007 and provides data from vehicles that can be used to recover stolen vehicles, predict engine failures and other cases. The startup's proprietary product is a device called Intelli7, a GPS-based unit that enables car owners to track their vehicles and even immobilise them in case of a theft. It offers its services to retail and enterprise customers.
In May, Mumbai-based Vahanalytics, run by Urbtranz Technologies Pvt. Ltd secured seed funding worth $200,000 (around Rs 1.3 crore) from Venture Catalysts, led by Anirudh Damani, partner at Arth India Ventures, and Vikram Lakhotia, managing director of Standard Transport Corporation. The firm, founded in early 2016, captures real-time data on driving habits and road conditions with the help of a smartphone. This data is then processed to provide useful insights.