Mumbai-headquartered P2P bike and car rental startup Drivezy has raised $5 Mn, as part of is first round of initial coin offering (ICO). Apart from the company’s existing investors, the round also saw the participation of high net worth individuals (HNIs) from Japan and Singapore.
As per reports, Drivezy’s first ICO round was open to investors with a minimum net worth of $1 Mn or with an annual income upwards of $200K.
According to sources close to the development, Drivezy will be exchanging the money raised through the initial coin offering into dollars via US-based cryptocurrency exchanges.
With the newly-secured capital, Drivezy is looking to add another 800 cars and bikes to its fleet.
Initial coin offering, for the uninitiated, is an unregulated method of crowdfunding, through which companies can raise capital from investors dealing in cryptocurrencies such as Bitcoin, Ethereum and others.
Through ICOs, investors can purchase cryptographic tokens, which entitle them to a share of the revenue generated by the company they are investing in. For its first round of ICO, Drivezy reportedly sold around 3 Mn tokens at a unit price of 0.00141 ETH.
Drivezy Going The Initial Coin Offering Ruote
In a bid to expand its peer-to-peer sharing marketplace for cars and bikes, Drivezy floated its private initial coin offering in Japan at a conference hosted by AnyPay, back in October 2017.
AnyPay, a Japanese fintech company that is also an investor in Drivezy, is currently providing the startup with ICO advisory support, in terms of scheme structuring and token development.
At the time of the launch, it was reported that the ICO would be divided into two private offerings and would involve the sale of 12.5 Mn cryptographic tokens overall. As per the reports, the second offering was slated to take place from 1st to 31st January 2018.
As part of the ICO, 95% of the revenue generated by customers renting the vehicles through Drivezy will go to the ICO investors and 5% to Drivezy, between the 1st and 5th of every month.
Speaking at the launch in Japan, Ashwarya Singh, co-founder and CEO of Drivezy stated, “With the growing popularity of Bitcoin in India, we feel that this is the right time to open alternative means in the sharing economy. This ICO is part of our vision to leverage the power of the blockchain to build an open, secure and transparent technology to globalise the Indian car sharing marketplace.”
As revealed by Singh back in October, the car rental startup is planning to use a major part of the funds to create RentalCoins – a currency for the car-sharing industry.
“RentalCoins can potentially create almost 1 Mn micro-entrepreneurs who can supplement their household income by renting their assets,” Singh told Inc42 at the time.
Built on the Ethereum blockchain, RentalCoins is a distributed technology tailored for the sharing economy. Through this, Drivezy aims to create a fleet of collaboratively owned vehicles that shall be accessible to all.
Additionally, Drivezy partnered with Unocoin, an Indian Bitcoin exchange company, to accept Bitcoin as a mode of payment. The startup reportedly launched the facility of paying for vehicle rentals using cryptocurrencies in October last year. However, since then, it has discontinued the service, citing high costs.
Elaborating further, Singh told Livemint, “Unfortunately, we had to discontinue the pilot due to the escalating transaction costs which are often as high as $60 per transaction. We shall however stretch the scope of RentalCoins in the second phase to cover crypto transactions on our platform.”
Drivezy: From 2015 To Present
The Y Combinator-backed self-drive car rental service JustRide had rebranded itself as Drivezy in July 2017.
Founded in April 2015 by Ashwarya Pratap Singh, Hemant Kumar Sah,Vasant Verma, Abhishek Mahajan, and Amit Sahu, Drivezy was selected for Google’s Launchpad Accelerator program in November 2015 as well as for Y Combinator’s summer batch of 2016.
Till date, the company has raised a total of $16 Mn in funding across multiple rounds.
The startup originally raised an undisclosed amount of angel funding from industry veterans like Alok Mittal, Zishaan Hayath, Niraj Singh, Nikunj Jain, among others in August 2015. Later in November of the same year, it had raised funding to the tune of $2 Mn.
In March 2016, it raised $400K in Pre-Series A round of funding from a group of angel investors. That was when the company shifted to a car-sharing marketplace from an aggregator-based model.
In November 2016, the car rental startup secured about $3 Mn (INR 20 Cr) in a bridge round of funding from Y Combinator partners Justin Kan & Qasar Younis (COO of Y Combinator), and Paul Buccheit (creator of Gmail).
Most recently, in October 2017, it raised $10 Mn in a part equity and part debt funding. The equity investment totalling $5 Mn was made by American and Japanese investors, including Das Capital, Axan Partners, Das Capital and IT Farm.
Meanwhile, a group of banks and NBFCs including Mahindra Finance, ICICI Bank, Cholamandalam Finance and Shriram Finance invested another $5 Mn in the venture through debt funding.
As of October 2017, Drivezy had a monthly GMV of over $950K. Boasting average monthly bookings of 22,000, it has completed more than 296.4K trips so far and is expanding at a monthly growth rate of 25%.
Since its inception, over 800 owners have listed 1,315 vehicles with Drivezy in four cities, namely Bengaluru, Mumbai, Pune, and Mysore. Of these 1,315 vehicles, 950 are cars while the rest 365 are bikes. Its registered user base currently stands at over 500K.
The startup, which entered the bike rental market last year by launching geared and non-geared bikes in Bengaluru, aims to expand to five more cities by the end of 2017. To that end, the company is eyeing to raise up to $15 Mn through multiple rounds of its initial coin offering.