M&M to leverage start-ups to expand tractor, small commercial vehicles biz

Mahindra & Mahindra, the $18-billion farm-to-financial services conglomerate, is leveraging start-ups to test the waters in new markets and expand its business.

Two young start-ups — Smartshift and Trringo — within the group are at the heart of this strategy. Trringo is an online platform for tractor rentals while Smartshift is a load exchange platform that connects small commercial vehicle owners with people looking to transport their goods within the city.

Aiming for IPO Both the start-ups are rapidly growing and M&M is looking at leveraging them to expand its tractor and small commercial businesses.

“Smartshift is today Mahindra-owned but we have a path where we want to be owned by others, potentially VCs and PEs coming in and at some point having an IPO and making it a separate public listed entity,” Anish Shah, Group President of Strategy for the Mahindra Group, told BusinessLine .

Mahindra has adopted the same strategy with several group companies, including Mahindra Holidays, Mahindra Finance and Tech Mahindra, and it has worked in its favour.

“We are really a federation of companies and if you look at the history of the company, we’ve had a lot of start-ups within the Mahindra group that are fairly large businesses now,” Shah said.

The benefit for us is that is helps create value for the group. If we constrain it and make it Mahindra only, it will not take off in the world outside, Shah said.

Smartshift has been created as an open platform that works with all small commercial vehicles. The platform is helping the company get insights into the needs of a small commercial vehicle buyer as well as assess the market better.

“Will Smartshift help Mahindra sell more small commercial vehicles? Directly, no. But indirectly, yes because we are creating value for our customer and it creates brand building as well,” Shah said.

M&M is similarly using Trringo to test waters globally for its tractor business. “We are looking at international expansion of Trringo. That’s where we feel it can help us get into new markets and understand those markets better. Then we can potentially bring our tractor manufacturing in those markets.”

Market expansion plans Shah explained that while M&M is the largest tractor manufacturer in the world, it still plays only in limited geographies. With Trringo, the company hopes to gain insights into the needs of different markets before planning commercial operations for its tractor and farm equipment business.

M&M however, is not stopping at just these two start-ups but also looking at creating more such start-ups while also scouting for start-ups that it can invest in or work closely with.

“We look at changes happening in the world and we look at our business and say how can these changes help our businesses,” Shah said. “We are looking at incubation centres both in India and overseas. Some we’ll do ourselves and some through partners. One example is we are looking at an incubation centre for Blockchain, which will be global.”

New start-ups Apart from Blockchain, M&M is looking for start-ups in the space of Internet of Things and analytics, farmtech, agritech, fintech, artificial intelligence and virtual reality.

“There would be some ideas coming from our employees and those would be start-ups that we will incubate internally. There will be some ideas that’ll come from outside and those would be ideas where we’ll potentially invest in or incubate or partner,” Shah said.

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