How Narain Karthikeyan, India’s 1st F1 Driver, Built a Successful Startup in Just 3 Years
Narain Karthikeyan, India's first Formula 1 race car driver, now runs a business of refurbished bikes, which employs around 250 people and is backed by approximately $11 million in funding.
In November 2019, Narain Karthikeyan, the first ever Indian Formula 1 driver and a standout figure in the world of Indian motorsports, was competing in Fuji, Japan, at the Super GT x DTM Dream Race for the Honda-backed Moduko Nakajima Racing team.
After winning the race, Narain thought he would come back to the team and compete the following year since he had another year left on his contract.
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But fast forward a couple of months and the COVID-19 pandemic struck which resulted in everything getting shut down, including the prospect of racing in Japan the following season. Although Narain would compete again at the Asian Le Mans Series for Racing Team India in 2021, the pandemic triggered a long held desire—to become an entrepreneur.
“The travel restrictions were quite difficult and racing came to a premature halt. What competing in high-level motorsports like Formula One has done is help me get connected with the entire automotive ecosystem. And if I ever ventured into putting a business together, it had to be related to automobiles,” Narain explains in a conversation with The Better India.
For Narain, the focus had to be on affordable mobility since it was the need of the hour. As this 2020 KPMG report stated, “With the need for social distancing and hygiene, coupled with financial constraints, consumers are expected to prefer affordable personal mobility modes.”
“Affordable mobility was the need of the hour. Backed by this vision, we started DriveX Mobility, a brand-agnostic mobility platform in the pre-owned two-wheeler category that caters to different needs of the affordable mobility sector in India. Since founding it, we’ve built a robust tech platform and are probably in a position to become market leaders in the segment,” he says.
Incorporated in April 2020, DriveX Mobility claims to provide “top quality refurbished two-wheelers to customers and allows them to buy two-wheelers at reasonable prices”. In August 2022, Indian two-wheeler giant TVS Motor Company acquired a significant 48.27% stake in the pre-owned two-wheeler platform for a hefty INR 85.41 crore.
Elaborating on their decision to buy a stake in DriveX, Sudarshan Venu, Managing Director at TVS, said in a press release, “The pre-owned two-wheeler market is largely unorganised today. Narain and his team have built a unique platform that can scale up quickly. DriveX has a vision to bring a change in this segment by building trust, assurance, and transparency through end-to-end, high-quality products and customer experience through innovative solutions.”
Employing around 250 people, delivering 2,500 units a month (from 15 in August 2020) and acquiring external funding of about $11 million over two rounds, DriveX has risen very quickly. Late last month, they even announced the opening of 10 new dealerships across India.
Love for automobiles
Born and raised in Coimbatore, Tamil Nadu, Narain grew up amidst people who share a unique love for automobiles. “There’s a huge culture of racing and rallying in Coimbatore. It’s a city where engineering seems to be one of the hallmarks. A lot of people modify their cars and that culture still exists. So, I think it was natural that growing up there I would discover a passion for cars and bikes. And my father GR Karthikeyan (a former Indian national rally champion) also used to rally. That’s how I got hooked onto automobiles, I suppose,” he explains.
But did he ever envision becoming a professional race car driver competing in Formula 1? As Narain explains, “The ambition was always there. When I was around maybe 10 or 11 years old, I caught the bug. I started following Formula One at that time. It was quite difficult to even view the races on TV because we had to get recorded tapes from my relatives who lived in the United Kingdom. These tapes would be sent in a courier package.”
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“Only after a month or so after the races, you were able to watch them. It was great growing up with like-minded friends and family. So, at a very early stage, I thought maybe I could become India’s first Formula One driver. And that’s how the dream evolved from there on,” he adds.
Suffice to say, Narain fulfilled his dream. After shining in a series of international motorsport competitions in the late nineties and the early noughties like the Formula Asia Championship, British Formula 3 Championship, Formula Nippon F3000 Championship and the Nissan World Series, Narain made his F1 debut with the Jordan team in 2005.
In his debut season, Narain achieved his highest F1 finish of fourth place at the 2005 United States Grand Prix. After competing for a further seven seasons at the highest level of the sport, Narain moved on to different pastures and created a unique legacy for himself. For his achievements in motorsports, Narain was awarded the Padma Shri in 2010.
Why sell pre-owned two wheelers only
In April 2020, Narain founded DriveX alongside Christopher Sargunam. After a career in race car driving, why did he decide to venture into pre-owned two-wheelers of all things?
“As a business, the opportunity for two-wheelers, especially in the pre-owned space, is very large in India. It’s about one and a half times the size of the new two-wheeler market. But this pre-owned vehicle two-wheeler space has largely been transacted through an unorganised broker network. For customers, we add a lot of value to these pre-owned two-wheeler bikes. These bikes became more sustainable and efficient. We give customers wanting to purchase a pre-owned vehicle an experience of a new two-wheeler,” claims Narain.
“We have our refurbishing (refurb) factories. We have our touch points, i.e. own retail outlets & dealer outlets. And the experience a customer goes through with us is pretty close to what he or she would have gone through while buying a new bike. That is the amount of value we’ve been able to add. Plus, we’re also giving our customers one-year warranty service. So, the framework is built very similar to a brand new two-wheeler. That’s the thought behind this whole DriveX as a platform,” he adds.
But why not four-wheelers then?
“In the last 10 years, a lot of digital platforms have evolved in the pre-owned four-wheeler market. We took the right decision to get into pre-owned two-wheelers or else we would have been one amongst the 20 players selling cars. On a personal note, my first love was always bikes. But somewhere down the line I got more interested in racing cars,” explains Narain.
Their business model
DriveX sources pre-owned two-wheelers from C2B (customer to business) and B2B (business to business) channels. After sourcing, these pre-owned two-wheelers make their way to the startup’s in-house refurbishing factories in Hosur and Coimbatore.
“We refurbish these vehicles to the highest quality standards. We also have OEM (original equipment manufacturers) support from the likes of Bajaj, TVS and others with OES (original equipment supplier) parts. After refurbishing these bikes, we have currently 38 outlets/touch points/dealerships where we retail these vehicles from,” he claims.
As Narain notes, there are a lot of challenges in terms of getting the right parts and suppliers.
“What has helped us a great deal is the digitalisation of these spare parts. When a technician wants a certain spare part, he or she can scan for this product on a digital platform we’ve integrated into our back office. At the level one inspection itself, we know exactly what parts to acquire and our just-in-time inventory management system helps us a lot in achieving a quick turnaround. Of course, we’ve not perfected this process yet,” he says.
“We are still one-and-a-half years old as a venture. So, we keep evolving and the more data that comes in, the better we will become. The cataloguing of these parts is the most important part of this venture or else the time taken to refurbish it is extreme,” he adds.
Not too long ago, Narain claims that this process from sourcing to putting out these refurbished vehicles in the market took about 90 days per vehicle.
“Today, our turnaround time is about 45 days and we are evolving. We are evolving as we get more data and finetune our process. The target is to further reduce this turnaround time by half. This is possible because we have a good team which also receives a little external help. We have good garage software. So, all these elements are helping us to get that TAT (turnaround time) even lower. But, as stated earlier, it’s a very complex task. Given our rate of progress, we should be able to bring down the turnaround time every quarter,” he claims.
What has also helped Narain is his ability to leverage his nearly three decade-long experience as a professional motorsport athlete into this business.
“Formula One is a business and a sport as well. There are a lot of parallels in terms of getting the right team to get the desired results. I’m extremely happy to say that we’ve put together a very strong team who eats, breathes and sleeps two-wheelers; especially. At our two refurbishing centres, for example, we employ north of 150-odd technicians. And, it’s (automotive industry) a very small community; you know the people in the market. So, we were quickly able to put a great team together. That’s what has driven the business,” he claims.
“It’s also about understanding the processes. These are pre-owned two wheelers that require servicing. For example, you need to see if there is carbon build up in the cylinder head. You need to see if the valves are seated properly, the clutch works properly and so on. We use the latest borescopes, which means you don’t have to disassemble the engine to examine whether it requires any fixes, and this helps us reduce the turnaround time,” he adds.
Thus far, DriveX has been able to generate funding to the tune of USD 11 million in their Seed and Series-A rounds in December 2021 and October 2022 respectively.
“As the business grows, we need more capital of course. We want to first do some more expansion pan-India and then hopefully we will be in a much stronger position to do a Series B round as well,” he claims.
Given a growing shift to electric vehicles (EVs) in India, Narain believes that DriveX will eventually pivot to pre-owned two-wheeler EVs. “But in India, the IC-engine market is going to be around for a long time, particularly in Tier 2 and Tier 3 cities and towns. These are aspirational people and the market is still going to be large for ICE vehicles, especially two-wheelers. It’s a tried and proven technology, and will be around for a long time,” he says.
“So, we want to keep putting out quality products. If we do that, we will be around for decades. The size of the market is $25 million per annum. There is a lot of scope to become a very large platform and our complete focus is in India,” he adds.
He also acknowledges what a different challenge this will be compared to his career in motorsports. “I’ve been a professional athlete for most of my life, but this is a completely different challenge. I’m still far away from being a successful entrepreneur. As a digital platform, we’ll continue to evolve. But ultimately, putting these quality vehicles on the road will determine our future as DriveX. We have everything there to make this successful,” he says.
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