Zoomcar raises US$ 40 million in Series C from Mahindra, others

Bengaluru: Self-drive car rental start-up Zoomcar India Pvt. has raised $40 million in a Series C funding round led by automobile maker Mahindra & Mahindra, the company said in a statement on Friday.

Existing investors like Ford, Sequoia Capital, Empire Angels, Nokia Growth Partners and others also participated in the round.

Zoomcar’s will use the fresh capital primarily for accelerating its marketplace supply growth, improving its IoT (internet of things) technology capability, and for expanding across India. The company lets users book vehicles and make the payments online. Users will have to locate a Zoomcar car lot within their locality to pick up the vehicle. It also offers doorstep delivery of the rented car.

The company had also launched an associate programme in April 2016, which allowed people to lease their own cars to its platform under a revenue-sharing model. Zoomcar charges a 25% commission on revenue that its associates make.

Mint reported in November last year that Zoomcar was in talks to raise money from new and existing investors. It was also running an electric vehicle pilot in Mysore through a tie-up with Mahindra & Mahindra. It plans to launch around 500 more electric vehicles across 20 cities in India in the coming months.

The company had raised $24 million in Series B round in August 2016 led by Ford Smart Mobility Llc, and another $21 million in two tranches between October 2014 and July 2015, from Sequoia Capital, Empire Angels, T.V. Mohandas Pai, among others. This takes Zoomcar’s total funding till date to $85 million.

Zoomcar has a customer base of more than 2 million on its platform. It had started shifting to a marketplace model last year and said that it would sell all vehicles in its fleet over time. The company said that its marketplace model currently accounts for 25% of its total 3,000 vehicle fleet, which is a mix of company-owned vehicles and those leased from third parties.

In October 2017, Zoomcar introduced a new bike-sharing service named PEDL, which currently operates across 10 cities with a fleet of more than 3,000 cycles. The service claims to complete nearly 15,000 rides per day. With the fresh funding, the company also expects to increase its cycle count and plans to expand across more than 75 cities by year-end.

“We’re incredibly excited to welcome the Mahindra team on board for this next phase of growth within the Indian self-drive mobility space. Our collaboration with Mahindra dates back to 2013 when we first kicked off in Bangalore. Most importantly, Mahindra shares Zoomcar’s vision for multi-modal urban mobility and we look forward to leveraging their diverse platform to help accelerate the transformation to a shared, electric mobility future for India,” said Greg Moran, chief executive officer, Zoomcar, in a statement.

For the year ended March 2017, Zoomcar reported a loss of Rs100.4 crore, which narrowed down from Rs101.4 crore in the previous fiscal year. Total revenue grew 35% to Rs121.2 crore from Rs89.82 crore in the previous fiscal.

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