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How roadside assistance firm Cross Roads overhauled its business model

January 21, 2016

Cross Roads India Assistance Pvt Ltd, a roadside assistance provider for cars and two wheelers, is looking to register a four-fold revenue growth by offering its services through a digital platform as well.
The company, which has last year raised funding from Sixth Sense Ventures, is following a hybrid business model. “We would act as a marketplace for garage owners and technicians to expand in terms of geographies and customers. We have already tied up with 18,000 of them in 15 cities across the country,” said Puneet Sharma, chief operating officer at Cross Roads India.
The company has launched an app four months ago which enables users to get in touch with the firm when a car breaks down. The firm tracks the user’s location and connect him/her with the nearest garage or mechanic.
The company claims that the digital model has helped it increase its customer base to 4.1 lakh from 25,000 within a year. It hopes to attract 1 million customers by the end of this year.
“We are attending to nearly 1,350 roadside repairs everyday now. Earlier, our 500 strong team used to handle 1,200 cases,” said Sharma, an IIT-Lucknow alumnus.
The company is running this app-driven model in Kolkata, Mumbai, Bangalore, Chennai, Hyderabad, Jaipur, Udaipur, Baroda, Ahmedabad, Goa, Lucknow, Kanpur and Bhubaneshwar. “We are in advanced stages of talks with several venture capital firms to raise $25 million to support our expansion to 10-15 cities where we already have a customer base,” he said.
However, it said it will retain the brick and mortal model too. Its fleet of 250 vans, procured at an investment of Rs 5 lakh each, will still provide roadside repair and assistance. Sharma said the company is planning to double the number of employees in six months.
Last year, it had secured its first institutional fundraise through a Series A round from Sixth Sense Ventures, which put in about Rs 10 crore ($1.5 million) for a significant minority stake.
The company, however, retains a subscription model under which it charges Rs 999 for support for 12 months. Besides, it has started following a pay-per-use model under which it is charging Rs 399 for one-time support from non-subscribers. “We are getting Rs 100 from each of these transactions,” he said, adding its monthly sales range Rs 2-3 crore.
In the B2B space, it handles several major players in insurance, telecom, e-commerce and DTH sectors that include, Panasonic, Airtel, Micromax, ShopClues, Mydala, Tata Sky and Dish TV. The company claims it charges Rs 50 lakh-1 crore from a corporate client for providing support for a year. “But, B2C segment is contributing 85 per cent of the business,” said Sharma.
Sharma was associated with Tata Docomo, Sistema Shyam Teleservices Ltd and before joining Cross Roads India in April last year.
The company, which operated as a subsidiary of Action India Pvt Ltd that was launched in 1999, churned out revenues of Rs 14 crore for the year ended March 31, 2014 and Sharma claimed that it ended FY15 with Rs 15 crore. But, he is hopeful of closing this year in March 31 with Rs 60 crore backed by the growth recorded from the new business model.
The company claims that it has a market share of 72 per cent in the out-of-warrant-assistance segment. It competes with the likes of MotorExpert, TVS Automobile Solutions Ltd’s MyTVS and