DEG, the investment arm of German state-owned bank KfW, is to invest INR850 million ($10 million U.S) in India-based WheelsEMI Pvt. Ltd., the parent company of motorcycle marketplace Bike Bazaar.
Founded by Karunakaran Vadakkepat and Srinivas Kantheti in 2017 and headquartered in Pune, Bike Bazaar specializes in the sale, financing, insurance and servicing of used motorcycles.
FkW is a promotional bank that aims to improve economic, social and environmental living conditions worldwide on behalf of the German government.
According to an announcement from DEG, it will receive compulsorily convertible preference shares in WheelsEMI Pvt. Ltd. It notes that Bike Bazaar’s social impact-led business approach is central to DEG’s patronage. DEG believes Bike Bazaar’s direct collection model and on-site financing solutions (via dealerships) can help underbanked populations in rural areas finance and procure used motorcycles.
“WheelsEMI is projecting that about 30% of its financing business will be for electric motorcycles by 2030, thus also significantly contributing to the climate agenda,” DEG said. According to WheelsEMI, Bike Bazaar has so far served more than 325,000 customers across 140 locations, disbursing around $206 million in loans. The company has previously noted that about 70% of its first-time borrowers are from rural and semi-urban areas.
In September 2022, Bike Bazaar raised $21 million in a Series D funding round. The round was led by Women’s World Banking Asset Management (WAM), which is also an impact-led investor. Bike Bazaar’s aim of empowering women, particularly in rural areas, who need private transport drove WAM’s investment.