Excl: Dial-in auto rickshaw service Autowale raises Rs 2Cr in angel funding; Eyes break-even in FY13
Autowale.in, a dial-in auto rickshaw service run by Pune-based Ubida Solutions Pvt Ltd, has raised angel funding of around Rs 2 crore some time ago from Global Super Angels and a local Pune-based investor (each investor brought in around Rs 1 crore).
Global Super Angels founder Rajesh Sawhney (also the president of Reliance Entertainment) has joined the board of Autowale as part of the deal.
Half of the money raised by the two-year-old startup has been utilised for operations and product development. But the company is still sitting with the balance as it seeks to scale up its business.
Started by IIT-Kanpur alumni Mukesh Chandra Jha and Janardan Prasad in 2010, Autowale aims to solve issues regarding price negotiation and driver behavior. A commuter can call its number and book an auto an hour before starting and the three-wheeler will turn up at his/her place on time. Passengers only pay government-approved charges and one can even opt for weekly/monthly billing or online payment if you are a regular customer. In addition, users get GPS-tracked auto-rickshaws, well-behaved drivers and the right fare, claims the firm.
The business model followed since July last year involves buying the miles and minutes from drivers at a cheaper rate and then charging customers at the rate approved by the government.
Speaking to Techcircle.in, Jha said the margins are good even though drivers are paid for 'dry run' "the time when an auto is running empty on its way to pick up a passenger or on its way back after the drop.
"Our aim is to minimise the 'dry run' and we are looking to create parallel demands, so that a driver doesn't have to travel without passengers," Jha added. At Autowale, drivers have defined work hours and thus can ply independently when the schedule is over. The service covers the entire city of Pune and also the outskirts like Chinchwadi and Pimpri.
The company currently has 150 auto-rickshaws in its fold and plans to raise the number to 500 soon. Ask Jha about customer response and he commented, "We are doing very well. At a growth of 40 per cent month-on-month (since the past few months), we expect to break even in the current financial year."
In the near future, Autowale will come up with a Web platform for bookings, as well as a mobile platform. It is also looking to launch the service in other cities.
The market opportunity is huge, considering the lack of organised players in cheaper private transport service segment in cities. While auto rickshaws are omnipresent in India, they are run by standalone operators and remains an unorganised sector at present.
A similar service launched in Gurgaon by the name of Radio Tuktuk also received immense response but it is now struggling due to a huge gap in supply and demand. Customers have to make bookings 2-3 hours in advance and their requests are turned down at times.
Queried about this challenge, Jha stated that the business model is different and they are only hiring the drivers part-time; so the scalability is high. Autowale will look for Series A funding by the end of this year.
Global Super Angels, which currently has 13 members on board, was founded in February 2011 by Rajesh Sawhney, president of Reliance Entertainment. Other key members include Sasha Mirchandani from Kae Capital; Vijay Shekhar Sharma, founder of One97 Communications; Dinesh Agarwal of IndiaMart.com; Ravi Adusumalli of SAIF Partners; Deep Kalra, founder & CEO of MakeMyTrip.com; Naveen Tewari of InMobi; Murugavel Janakiraman, founder of Bharatmatrimony.com and Rajan Mehta of LiveMedia. This is the group's third investment in a company. Earlier, Global Super Angels invested in e-com logistics firm Chhotu.in and Mumbai-based medical devices startup Biosense Technologies Pvt Ltd.