Bengaluru-based two-wheeler rental platform Vogo had announced the closure of Series C round of funding but has continued to top up with fresh investments.
According to the Ministry of Corporate Affairs filings accessed by Inc42, in March and April, the company has received an addition of INR 3 Cr funding in Series C round from Ramachandran Narayan of Gaja Capital and Exponentially I Mobility LLP. While Narayan has been issued shares worth INR 1 Cr on a pro-rata basis in Series C, Exponentially I Mobility LLP has been issued shares on a private placement basis.
The nominal value of shares was INR 100 with a premium of INR 14,219. Exponentially I Mobility LLP holds 0.2% stake after the investment while Narayan holds 0.12% stake post-offer.
The company filings showed that the issue has been made for business expansion and growth.
Founded in 2016 by Anand Ayyadurai, Padmanabhan Balakrishnan, and Sanchit Mittal, the startup offers commuters round-the-clock scooter rental services. Vogo claims that its bikes have completed over 5 Mn trips from more than 1 Mn riders with a total mileage of over 30 Mn kilometres. The company is operational in Bengaluru, Hyderabad, Manipal, and Mysuru.
In a statement, Vogo’s CEO Ayyadurai said that company’s rapid growth in a record time span has been on the back of its unique strengths of having a dock-based model and best-in-class asset management using proprietary IoT technology.
In the financial year ending March 2019, Vogo’s expenses grew 94X with a bare 2X growth in revenue. The company has also reported a loss of INR 39.2 Cr in FY, a 10.8X increase from INR 3.3 Cr in FY18. The reported losses were 5.6X the company’s total income of INR 6.98 Cr. Vogo’s financials prove that profitability is not only elusive but a long shot for India’s bike-rental startups.
Interestingly, India leads the world in the bike and scooter rental market in terms of fleet size. According to a study by German EV manufacturer Unu, the fleet size of bike-rental apps in India is now over 15K vehicles, which is higher than the more developed economies of the US and other Western countries.
However, with most flight and intercity travel coming to a halt because of the coronavirus and Covid-19 pandemic, the Indian shared mobility sector has been hit really hard. Bike-rental companies Bounce and Vogo have witnessed a 10% to 15% decline in terms of customers.
Hence, the fresh funding can help the company keep up its runway for future as the ecosystem envisions major hit in the businesses over the next 6-18 months due to the pandemic.