Once favourite of venture capitalists, the automotive start-up’s inflows are drying up as we all know. Moreover, automotive OEMs themselves are borrowing heavy to withstand blow of COVID. Next few months will decide the fate of a number of start-ups. Will Acqui-hire be solace? Situation looks grim as even the acquihire hopes will take a beating to save the faltering Start-Ups’ talents.
Keen look at the recent top funded start-ups reveals that majority of them are logistics or aftersales start-ups. Only a few like Ola Electric, Euler motors are the mobility product Start-ups. Even the list of top disruptors in automotive space have only few product ones, but the long tail of me-too start-ups mostly are product based (2/3Wh).
Acquihire has not been in vogue in automotive product start-up ecosystem unlike it’s peers in digital/AI/ML, healthcare, e-commerce, tourism, logistics etc. However, there has been some news on Auto-linked start-ups.
Bengaluru-based car services and repairs solutions firm ‘Pitstop’ is present across tier-1 cities, it’s core team has experts from the automotive sector who joined after the acquihire of ‘Motorwhiz’. Founder and CEO of ‘MeriCAR’ is also a key member of Pitstop.
Ola acqui-hired AI start-up ‘Pikup.ai, Binny-Bansal Backed ‘Acko’ acquihired ‘VLerTech’, logistics start-up ‘LetsTransport’ acqui-hired ‘Pixlcoders’, Bike taxi firm ‘Rapido’ acqui-hired analytics start-up ‘Vahanalytics’ which again reminds me of upcoming data analytics boom. While other complementary moves include Car Purchase cum Service Platform ‘BookMyTime’ doing the same with ‘Servicemykar’, the ‘Quikmile’ team got absorbed into Airtel’s X Labs “innovation factory” in Bengaluru.
However, barely there are cases of acquihire of product start-ups in automotive space. If you leave aside a few big names, is it an indicator that these start-ups have low innovation quotient & Technology element unlike digital? Are these just business ventures with trade of SKDs or is there more to it?
Only product start up I could locate which was acqui-hired after a tough situation last year is Lithos Motors Pvt Ltd. Litho built completely in-house electric bikes for the last mile logistics market. Faasos, Dominoes & DTDC were some of their key customers. As the grapevine says, in august 2019 the company was acqui-hired by one of the UTL (United Telecom Limited) subsidiary Enervoir Systems Pvt Ltd. Litho’s talent pool was given key position in E-Mobify (another subsidiary of UTL).
Given the COVID-19 impact on china trade, the drought in investment channels and the meatless acqui-hire case, I believe there is agony ahead for such product start-ups which mushroomed in recent years.
Disclaimer – This article is written in full personal capacity and free of charge. This has no conflict of interest with the organisation I work or the current role I perform in the organisation or the information I have access in the organisation. This write-up expresses personal views purely based on information easily and widely available in public domain. Rights to reproduce is protected with self.
Pravesh Soni
Guest Writer, Thought Leader and Non-Profit ‘Student Start-Up’ Mentor.
Reference
- https://inc42.com/buzz/acko-acquihires-automotive-startup-vler-tech/
- https://yourstory.com
- https://nxtstartup.in/news-news/pitstop-car-service-provider-acquired-motorwhiz
- https://www.livemint.com
- https://enablersinvestment.com/bookmytime-acquihires-servicemycar-com/
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