INSUBCONTINENT EXCLUSIVE:
Cashify, a company that buys and sells used smartphones, is the latest India startup to raise capital from Chinese investors after it
announced a $12 million Series C round.
Chinese fundsCDH Investments and Morningside led the round which included participation
fromAihuishou, a China-based startup that sells used electronics in a similar way to Cashify and has raised over $120 million
Existing investors includingBessemer Ventures and Shunwei also took part in the round.
This new capital takes Cashify to $19 million raised
to date.
The business was started in 2013 by co-foundersMandeep Manocha (CEO), Nakul Kumar (COO) andAmit Sethi (CTO) initially as
‘ReGlobe.& The business gives consumers a fast way to sell their existing electronics, it deals mainly in smartphones but also takes
laptops, consoles, TVs and tablets.
&When we began we saw a lot of transaction for phone sales moving from offline to online,&Manocha told
TechCrunch in an interview
&But consumer-to-consumer [for used devices] ishighly opaque on price discovery and you never know if you&re making the right decision on
price and whether the transaction will take place in the timeframe.&
These days, the company estimates that the average upgrade cycle has
shifted from 20 months to 12 months, and now it is doubling down.
With Cashify, sellers simply fill out some details online about their
device, then Cashify dispatches a representative who comes to their house to perform diagnostic checks and gives them cash for the device
The startup also offers an app which automatically carries out the checks — for example ensuring the camera, Bluetooth module, etc all
work — and offers a higher cash payment for the user since Cashify uses fewer resources.
A sample of the Cashify QA for selling a
device.
Beyond its website and app, Cashify gets devices from trade-in programs for Samsung, Xiaomi and Apple in India, as well as
e-commerce companies like Flipkart, Amazon and Paytm Mall.
Used device acquired, what happens next is interesting.
The startup has built out
a network of offline merchants who specialize in selling used phones
Each phone it acquires is then sold (perhaps after minor refurbishments) to that network, so it might pop up for sale anywhere in
India.
With this new money, Cashify CEOManocha said the company will develop an online resale site that will allow anyone to buy a used
phone from the company network
Devices sold by Cashify online will be refurbished with new parts where needed, and they&ll include a box and six-month warranty to give a
better consumer experience,Manocha added.
Today, Cashify claims to handle 100,000 smartphones a month, but it is planning to grow that to
200,000 by the end of this year
Cashify said its devices are typically low-end, those that retail for sub-$300 when new.A large part of that push comes from the online
site, but the startup is also enlarging its offline merchant network and working to reach more consumers who are actually selling their
That where Manocha said he sees particular value in working withAihuishou.
Cashify is also developing other services
It recently started offering at-home repairs for customers andManocha said that adding Chinese investors — andAihuishou in particular —
will help it with its sourcing of components for the repairs service and general refurbishments.
Cashify estimates that the used smartphone
market in India will see 90 million phones sold this year, with as many as 120 million trading by 2020
That close to the 124 million shipmentsthat analysts estimate India saw in 2017, but with surprisingly higher margins.
A reseller can make
10 percent profit on a device,Manocha explained, and Cashify own price elasticity — the difference between what it buys from consumers at
and what it sells to resellers for — is typically 30-35 percent, he added
That more than most OEMs, but that doesn&t take into account costs on theCashifyside which bring that number down.
&When I sell to a
reseller, the margins aren&t that exciting which is why we want to sell direct to consumers,& the Cashify CEO said.
The startup has plenty
going on at home in India, but already it is considering overseas possibilities.
&We will focus on India for at least next 12 months but we
have had discussions on markets that would make sense to enter,&Manocha, explaining that the Middle East and Southeast Asia are early
frontrunners.
&We areworking very closely with one of the Chinese players and figuring out if we can do some business in Hong Kong because
that the hub for second-hand phones in this part of the world,& he added.
Note: The original version of this article was updated to correct
thatAmit Sethi is CTO not CFO.
