Zoomcar raises $40 million in Series C funding led by Mahindra

Existing Zoomcar investors, including Ford Smart Mobility, Sequoia Capital, Empire Angels, Nokia Growth Partners and others also participated in the Series C funding round. Photo: Hemant Mishra/Mint

Bengaluru: Self-drive car rental start-up Zoomcar India Pvt. Ltd has raised $40 million in a Series C funding round led by automobile maker Mahindra and Mahindra Ltd (M&M), the company said in a statement on Friday.

Existing investors, including Ford Smart Mobility, Sequoia Capital, Empire Angels, Nokia Growth Partners and others also participated in the round.

Zoomcar will use the fresh capital primarily for accelerating its marketplace supply growth, improving its IoT (Internet of Things) technology capability and for expanding across India. The company lets users book vehicles and make payments online. Users have to locate a Zoomcar car lot within their locality to pick up the vehicle. It also offers doorstep delivery of the rented vehicle.

The firm had also launched an associate programme in April 2016, which allowed people to lease their own cars to its platform under a revenue-sharing model. Zoomcar charges a 25% commission on revenue that its associates make.

Mint reported in November that Zoomcar was in talks to raise money from new and existing investors. It was also running an electric vehicle (EV) pilot in Mysore through a tie-up with M&M. It plans to launch 500 more EVs across 20 cities in the coming months.

The firm raised $24 million in Series B round in August 2016 led by Ford Smart Mobility, and another $21 million in two tranches between October 2014 and July 2015, from Sequoia Capital, Empire Angels and T.V. Mohandas Pai among others. This takes Zoomcar’s funding till date to $85 million.

Zoomcar has a customer base of more than two million. It had started shifting to a marketplace model last year and said that it would sell all vehicles in its fleet over time. The company said that its marketplace model currently accounts for 25% of its total 3,000-vehicle fleet, which is a mix of company-owned vehicles and those leased from third parties.

In October 2017, Zoomcar introduced a new bike-sharing service named PEDL, which currently operates across 10 cities with a fleet of more than 3,000 cycles. The service claims to complete nearly 15,000 rides per day. With the fresh funding, the company also expects to increase its cycle count and plans to expand across more than 75 cities by the year-end.

“We’re incredibly excited to welcome the Mahindra team on board for this next phase of growth within the Indian self-drive mobility space. Our collaboration with Mahindra dates back to 2013 when we kicked off in Bangalore. Most importantly, Mahindra shares Zoomcar’s vision for multi-modal urban mobility and we look forward to leveraging their diverse platform to help accelerate the transformation to a shared, electric mobility future for India,” Greg Moran, co-founder and chief executive of Zoomcar, said in a note.

For the year ended March 2017, Zoomcar reported a loss of Rs100.4 crore, which narrowed down from Rs101.4 crore in FY16. Total revenue grew 35% to Rs121.2 crore from Rs89.82 crore in FY16.