Cashify, a company that buys and sells used smartphones, is the latest start-up company in India to raise capital from Chinese investors after announcing a series C round of $ 12 million.
Chinese funds CDH Investments and Morningside led the round, which included the participation of Aihuishou, a China-based start-up that sells used electronics in the same way as Cashify, which raised more than $ 120 million. dollars. Existing investors, including Bessemer Ventures and Shunwei, also took part in the round.
This new capital takes Cashify to 19 million dollars amassed to date.
The company was established in 2013 by co-founders Mandeep Manocha (CEO), Nakul Kumar (COO) and Amit Sethi (CTO) initially under the name ReGlobe. The company gives consumers a fast way to sell their existing electronic devices; It deals mainly in smartphones but also takes laptops, consoles, TVs and tablets.
"When we started, we saw a lot of deals for phone sales going from offline to online," Manocha told TechCrunch in an interview. "But consumer-to-consumer [for used devices] is very opaque about price discovery and you never know if you are making the right decision on the price and whether the transaction will take place on time."
These days, the company estimates that the average upgrade cycle has gone from 20 months to 12 months, and now it is doubling.
With Cashify, sellers simply fill in some online details on their device, then Cashify ships a representative who comes to their home to perform diagnostic checks and gives them money for the device that day. the. The startup also offers an application that automatically performs checks – for example by ensuring that the camera, the Bluetooth module, and so on. work well – and offer a higher cash payment to the user since Cashify uses fewer resources.
Beyond its website and application, Cashify obtains replay programs for Samsung, Xiaomi, and Apple in India, as well as e-commerce companies such as Flipkart, Amazon, and Paytm Mall.
Used equipment acquired, what happens next is interesting.
The startup has built a network of offline traders specializing in the sale of used phones. Every phone that it acquires is then sold (perhaps after minor renovations) to this network, so that it can appear to sell anywhere in India.
With this new money, Cashify 's CEO, Mr. Manocha, said the company would develop an online reseller site that would allow anyone to buy a used phone on the network. business. The devices sold by Cashify Online will be refurbished with new parts, if necessary, and they will include a box and a six-month warranty to provide a better consumer experience, added Mr. Manocha
Today, Cashify claims to manage 100,000 smartphones a month, but plans to increase it to 200,000 by the end of the year. Cashify said that its devices are generally low-end, those that sell for less than $ 300 when they are new. Much of this boost comes from the online site, but the startup is also expanding its offline merchant network and is working to reach more consumers who are actually selling their device. It is there that Manocha says that he sees special value in working with Aihuishou.
Cashify is also developing other services. He recently started offering home repairs to customers and Manocha said the addition of Chinese investors – and Aihuishou in particular – would help him find components for the repair service and the general renovations.
Cashify estimates that the used smartphone market in India will see 90 million phones sold this year, with nearly 120 million transactions by 2020. This is close to the 124 million shipments that analysts estimate to have seen in India in 2017, but with margins.
A retailer can earn 10% profit on a device, says Manocha, and the price-elasticity of Cashify – the difference between what she buys from consumers and what she sells to resellers – is usually 30-35%, he added. This is more than most OEMs, but it does not take into account the cashify side costs, which reduces this number.
"When I sell to a reseller, the margins are not so exciting, that's why we want to sell directly to consumers," said Cashify's CEO.
The start-up is very successful at home in India, but is already considering opportunities overseas.
"We will focus on India for at least the next 12 months, but we have had discussions on markets that would make sense," said Manocha, explaining that the Middle East and Southeast Asia are precursors.
"We are working closely with one of the Chinese actors and we are wondering if we can do business in Hong Kong because it is the center of the occasional phones in this part of the world, "he added.
Note: The original version of this article has been updated to correct the fact that Amit Sethi is technical director and not financial director.