Ford Smart leads US$ 24-mn in Zoomcar funding

Bengaluru: Ford Smart Mobility, a subsidiary of US automaker Ford which was spun off in March this year to focus on advancing transportation technologies, has made its first investment in India through self-drive car rental service Zoomcar.

Ford led a $24-million investment in Zoomcar, which was announced on Wednesday along with the start-up firm’s existing investors Nokia Growth Partners, Sequoia Capital and Empire Angels. The investment is in line with Ford’s plan to turn itself into a mobility company rather than a mere car company.

“The gestation time between something that comes to the US and then comes to India is getting compressed. Whether it’s ride-sharing with Ola, car sharing with Zoomcar, or autonomous driving which is coming much faster than people think, Ford is taking a bet saying they’re not going to be manufacturers of cars forever,” said Greg Moran, co-founder and chief executive officer of Zoomcar.

Taking a view that in the distant future people might not own cars at all, and with autonomous vehicles hitting roads in the US by as early as 2018, Ford’s smart mobility division plans to bring together various modes of transport to build an efficient urban transport mechanism. 

Just like its technology peers in the US, Ford missed the bus in China, failing to enter significant joint ventures with local players to grow its presence there. To avoid making the same mistake in India, Ford is not only relying on its traditional car sales business, but is also making bets in future mobility solutions such as Zoomcar. 

Zoomcar, the four-year-old Indian start-up, enables users to rent a car via a smartphone app for any period they would like and drive themselves around. Unlike global rivals Hertz and Avis who are largely offline players, Zoomcar says it’s a technology first firm, much like the Uber for self-drive car services. 

With an inventory of around 2,000 cars, Zoomcar says it aims to grow that number to 10,000 within the next 12 months, largely driven by allowing individuals buy cars on behalf of it and share profits. By early next year, the company says it expects 75 per cent of its fleet to be owned by partners. 

Zoomcar says the model gives individuals in India an alternate model of ownership - their cars can earn them money by being utilised during the time when they would otherwise be parked. This is different from Uber and Ola, where taxi owners would have to employ a driver or themselves to chauffeur passengers around. In India, where car ownership penetration is very low, Zoomcar could boost ownership, in turn helping companies such as Ford. 

“Ford wants India to be a test bed - an incubator for technology that can be taken to Africa, Latin America, West Asia and Southeast Asia. In many ways, that resonates with us where we believe we should be exporting product and technology to the rest of the developing world,” added Moran.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.