Canaan Partners has announced an investment in MotorExchange, B2B auto exchange/bid platform for the Indian market.![motorexchange-logo[1]](http://i2.wp.com/www.NextBigWhat.com/wp-content/uploads/2009/12/motorexchangelogo1.gif "motorexchange-logo[1]")
An early stage investment, MotorExchange is a used vehicle marketplace that provides technology platform to facilitate transactions, dedicated and inhouse certification, and to help buyers and sellers transact via the system.
If you look at the current exchange market, they are primarily dominated by company owned services, which have in a way lost consumer’s trust. And that’s where lies the opportunity for an independent party to build a certification process (another startup in this space is vericar) and ofcourse, the marketplace.
What’s really commendable about motorexchange is the team strength- pretty much everybody comes from automobile industry and hope they bring in whole lot of insights, that other companies have missed out on.
What’s your take on this industry?
This is yet another “crony” investment by Canaan. Seemingly high profile team with a theoretical business plan.
Though Canaan declined to disclose the exact investment details, it is believed to be in the range of $2-5 million for a significant minority stake
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Just doing a follow up. Does anyone know if this industry is getting any better organised? $5mill for a minority stake makes this overvalued IMO. With that sort of money, they should be looking at a brick and mortar presence with a fantastic retail frontage.
Online, at best, they can book opportunities for a verification report service (someone else is already doing it I guess).
Or they could run it as a B2B2C service where a guy who wants to exchange his car drives it in into motor exchange, obtains a valuation report, and uses it to bargain for his new car. He pays nothing to motorexchange. Motorexchange in turn ‘refurbishes’ the car and sells it to the equivalent branded used-car showroom that gives its new used car customer warranty, etc.
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