Car Rental Platform Zoomcar To List On NASDAQ Via $456 Mn SPAC Deal

Bengaluru-based car rental platform Zoomcar has inked a merger pact worth $456 Mn with blank check firm Innovative International Acquisition Corp and is set to go public on NASDAQ in the US.

Following the merger, the combined entity will be renamed Zoomcar Holdings, Inc and will be listed after the transaction is completed in the first half of 2023.

The move comes a year after the decade-old startup first floated an IPO plan in June  2021 via a special purpose acquisition company (SPAC). Founded in 2013 by Greg Moran and David Back, Zoomcar had claimed that it would be eyeing markets beyond India after its listing.

After the merger, Zoomcar stockholders are expected to retain a majority of the outstanding shares of Zoomcar Holdings, Inc and the shares will be initially priced at $10 apiece.

When Zoomcar Holdings lists on NASDAQ, $235 Mn will be infused into the operations for tech development and global footprint expansion. 

Currently, the startup claims to have 3 Mn+ active users and over 25,000 vehicles registered for use on its marketplace. However, it must be noted that car rental startups were battered by the Covid-19 pandemic. 

The lockdown affected not just Zoomcar’s business model but also led to a host of cancellations and period where thousands of customers applied for refunds for cancelled bookings. In FY21, Zoomcar’s revenue fell by over 70% to INR 79.3 Cr, with a loss of INR 152.6 Cr.

To date, Zoomcar has raised more than $290 Mn in funding across multiple rounds from SternAegis Ventures, NKM Capital, Sony Innovation Fund and more. 

However, the company now claims that the post-pandemic recovery has provided steady growth. “Zoomcar’s car-sharing marketplace is positioned to cut across emerging markets. We expect to target future expansion opportunities in markets which include SE Asia, Latin America, MENA, and Sub-Saharan Africa,” Moran said in a press statement. 

He added that the company is targeting a fleet of 200 Mn+ cars by 2025 to cater to a car rental market worth over $90 Bn.

With this IPO, the startup will join the ranks of NASDAQ-listed companies such as Girish Mathrubootham-led Freshworks, Yatra.com, MakeMyTrip and others. 

Besides Zoomcar, BYJU’S and Flipkart are reportedly looking to list on the US stock market via the SPAC route.

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