Softbank Plans $35 Million Bet on India's Gomechanic

Softbank Plans $35 Million Bet on India's Gomechanic

SoftBank is doubling down on Indian car services. The Japanese tech giant plans to invest $35 million in GoMechanic, an India-based startup that offers a peer-to-peer car repair service. 

SoftBank has also invested $70 million in Drivezy, which offers a similar service. That company has since grown to operate in eight cities in India and recently launched a car rental service as well. 

The strong demand for new cars in India also fuels competition among service providers. Vehicle sales climbed more than 17% to over 2 million units last year, making the country the world's third-largest auto market after China and the United States.

What is GoMechanic?

GoMechanic is an online platform that connects car owners with mechanics in their area. When motorists need work done on their vehicle, they can book an appointment with a mechanic through the app. 

Once the work is complete, the mechanic will submit an invoice and schedule a time to collect the payment. 

Customers can choose between two types of service – Express Repair and Complete Repair. Express Repair is for minor problems, like a broken windshield wiper, while Complete Repair is for serious issues like a faulty transmission. 

If an owner doesn't have an authorized mechanic nearby, he or she can connect with a mobile mechanic. Those technicians will come to the car owner's location to perform repairs.

Why is SoftBank investing in GoMechanic?

SoftBank's interest in the car service industry is tied to its broader strategy to invest in companies that use data to improve services. 

This strategy is part of the company's Vision Fund, the world's largest private equity fund with $98 billion in capital commitments from investors. 

Drivezy and GoMechanic are just two examples of how SoftBank is putting that strategy into practice. 

The company is putting significant resources into each company and plans to expand its geographic reach. 

SoftBank is also betting that these two companies will benefit from an overall shift toward a gig economy. Gig work generally refers to short-term, often done on digital platforms, and is typically more flexible than a traditional job.

The Future of Peer-To-Peer Car Repairs

Car repairs are one of the most common reasons people take their vehicles to a mechanic. While having a certified mechanic on speed dial is good, the repair service industry is expensive and often inconvenient. 

While old-fashioned mechanics shops are far from disappearing, the rise of new car services like Drivezy and GoMechanic clearly shows how things are changing. 

These companies are designed to make finding and paying for car repairs easier. They also make it easier to find an authorized mechanic, which is important given the number of unlicensed mechanics in India. 

However, the question remains whether owners will trust these new car services. In particular, many people are uncomfortable with meeting a mechanic who does not work at a traditional shop.

Key Takeaway

As the number of cars on the road continues to climb in many parts of the world, more drivers will face the challenge of finding a mechanic to repair their vehicle. 

The rise of new car services, like Drivezy and GoMechanic, could make it easier for people to find a mechanic to repair their car. 

While old-fashioned mechanics shops are far from disappearing, the rise of new car services clearly shows how things are changing. 

These companies are designed to make finding and paying for car repairs easier. 

They also make it easier to find an authorized mechanic, which is important given the number of unlicensed mechanics in India.

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