Bengaluru-based self-drive car rental platform, Zoomcar, is reportedly in talks to raise around $500 Mn (INR 3,421 Cr) in a funding round led by automaker Mahindra & Mahindra.
Citing sources, a Livemint report said that the latest funding round will include a mix of debt and equity financing. It also stated that the startup’s valuation may go up to $1 Bn if at least 40% of the deal is completed via equity.
The sources added that Mahindra is expected to pour in around $300 Mn – $400 Mn (INR 2,053 Cr – INR 2,737 Cr) in the company. Its existing investors from the US are also expected to contribute in this round. The funds will be used for purchasing vehicles.
Inc42’s queries to Zoomcar were not answered till the time of publication.
Zoomcar was founded in 2012 by Greg Moran and David Back. It allows users to rent vehicles by the hour, day, and week.
Prior to this, Zoomcar had raised $3.6 Mn (INR 24.7 Cr) in debt funding from Gurugram-based seed stage venture capital fund Trifecta Capital. Earlier in February 2018, the startup had raised $40Mn in a Series C funding round led by Mahindra & Mahindra. Till date, the company has raised over $100 Mn.
In January, Zoomcar’s financial statement revealed that the company’s losses had widened to 10.2% in the year ended in March 2018 from FY17 due to increasing costs of doing business.
According to its financials, the company’s expenses rose to $39.22 Mn (INR 268 Cr) in FY18, from $32.20 Mn ( INR 220 Cr) in FY17. Meanwhile, annual revenue rose to $22.47 Mn (INR 153 Cr ) from $17.17 Mn (INR 117 Cr) in the previous year.
In December 2018, the company had temporarily suspended its dockless cycle-sharing vertical PEDL across the country to upgrade the cycle as the demand for the services was extremely high.
Growing Focus On Self Driving Car Rental Space
A report by Ken Research suggests that the Indian car rental market is expected to touch $12.5 Bn by 2019, growing at a CAGR of 35%.
As the potential market continues to show signs of growth, several players are looking to step up their game to capture the dominant position in the space. Most recently, cab aggregator Ola revealed its plans to invest over $500 Mn (INR 3,448 Cr) to launch its own self drive rental service.
Another notable player in this space, Drivezy is also looking to grab a bigger slice of the pie. Currently, SoftBank and Amazon are in talks to lead a $100 Mn (INR 690 Cr) equity financing round in Drivezy. The vehicle sharing marketplace has been on the lookout for fresh funds to expand its fleet across the country and also foray into the foreign markets.