Zoomcar To Raise $9.15 Mn From Institutional Investors

Nasdaq-listed car rental marketplace Zoomcar plans to raise $9.15 Mn via private placement of shares to certain institutional investors. 

In a statement, the company said it will use the fresh proceeds to repay nearly $3.6 Mn (INR 30.33 Cr) in outstanding debt to certain institutional creditors, as well as for general corporate purposes and working capital requirements.

The company also said that the $9.15 Mn cash proceeds will also include fees payable to the placement agent and other allied expenses.

The deal will see the startup issue 21.37 Lakh units at $4.28 (around INR 360.65) apiece. Each of these units will comprise a common share (or a pre-funded warrant), two Series A warrants (which can be converted into two shares at $4.03 apiece) and one Series B warrant, with an exercise price of $0.0001 for buying shares that will be decided on the reset date. 

As per Zoomcar, the Series A and Series B warrants can be converted after the company gets shareholders’ nod. The Series A warrants will have a term of 5 years, while the Series B warrants will be exercisable until “exercised in full”.

Founded in 2013 by David Back and Greg Moran, Zoomcar operates a one-stop shop platform for renting self-driving cars. It connects car owners with guests, who can choose from a selection of cars for use at affordable prices. 

Zoomcar began trading on the Nasdaq in December last year, following a SPAC merger with Cayman Islands-registered Innovative International Acquisition Corp. 

Since then, the company has been bracing choppy waters. In June this year, founder Moran was terminated as the company’s CEO after a 12-year tenure. A month later, Zoomcar’s global president Adarsh Menon also quit the company just six months into the job. 

On the financial front, the company trimmed its net loss by 92% to $2.53 Mn in the first quarter (Q1) of the fiscal year 2024-25 (FY25) from $28.78 Mn in the year-ago period due to a sharp reduction in its finance costs.

Meanwhile, revenue from services declined 15% to $2.20 Mn in the quarter under review from $2.61 Mn in Q1 FY24. 

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