Mahindra First Choice Wheels Ltd has signed a definitive agreement to raise Rs. 94 crores from San Francisco based investment advisor firm, Valiant Capital for a minority stake in the company. This is the second round of external private equity raised by the company; the first one was in 2008 from Delhi based Phi Capital, who continues to be an investor in the company.
The capital will be used to fund its growth plans over the next few years. With the physical presence critical to the used car business, the company has invested aggressively to organize the used car business in India. Commenting on this strategy, Rajeev Dubey, President (Group HR, Corporate Services and After-Market) & Member of the Group Executive Board, Mahindra & Mahindra Ltd. said, "We believe the "brick + click" ecosystem is very powerful in the used car business and over the years we have seen our consumers and dealers appreciate this value proposition. We will continue to invest in the overall growth of the hybrid model in the years to come".
The company plans to use the fresh funds infusion to accelerate its growth both of the physical network as well as adoption of its technology enabled products and services used by all stakeholders in the industry - NBFCs, Banks, OEMs, Dealers and Consumers.
Mahindra First Choice is planning to end 2015 with 500 franchise outlets and grow to 1800+ outlets in the next 5 years. In addition, it plans to use the funds to broaden its reach for its products and services across other used vehicle categories.
