Self-drive car rental service Zoom secures $8M from Sequoia, others
Bangalore-based ZoomCar India Pvt Ltd, which runs a membership-based, self-drive car rental service under the brand Zoom, has secured $8 million (around Rs 49 crore) led by Sequoia Capital, as per a company statement.
Former Infosys CFO T V Mohandas Pai and Abhay Jain of the Manipal Group among others besides a few existing investors Empire Angels, FundersClub and Basset Investment Group also participated in this round.
"We will use the funds to fuel growth. This funding will take us to more cities including Delhi, Mumbai, Chennai, Hyderabad (not in that order), and to 1,500-2,000 vehicles. We will continue improving our product, technology and service," said Zoomcar's co-founder and president David Back.
Zoom was founded by two Americans David Back and Greg Moran as an India-focused venture under the US-based parent Zoomcar, Inc. It launched operations in Bangalore with seven vehicles in February 2013 and has now grown to a fleet of 250 vehicles at about 40 locations across Bangalore and Pune. Zoom operates BMW, Ford Figo, Mahindra Scorpio, Volkswagen Vento, Mahindra Reva E2O, etc and charges customers on hourly or daily basis.
The rental starts at Rs 199 per hour or 1,999 per day for Reva E2O, while it is Rs 999 per hour or 9,999 per day for BMW 3-series. These rates cover the entire trip, including fuel, insurance, roadside assistance and tax. It has completed 30,000 bookings to date.
Zoom also provides in-car navigation, including real-time traffic updates, assistance in locating parking and location-based service apps at no additional charge.
"We think they have a shot at changing the rules on car ownership in India. We are delighted to back and support them in their endeavour to disrupt the traditional car rental market through a hyper-local car sharing model," Shailendra Singh, managing director of Sequoia India said.
The venture had previously raised $2.9 million from investors like Larry Summers, professors from Wharton, Harvard Law School and Cambridge's Judge School of Business among others who are reinvesting in the firm now.
"The opportunity here is astronomical," said Back. "Around the world, our business model thrives in ultra-dense cities with low car ownership rates. By 2030, India will have 68 cities with populations over 1 million, while all of Europe only has 35 such cities," he added.
Another player in the self-drive market is Myles run by Carzonrent, which also offers cab services under EasyCabs. Myles is present in some 16 cities including Bangalore and Pune, where Zoom currently operates.
Online cab aggregators have been quickly making a space for themselves in the urban transportation business.
The big players in that space include Olacabs, which has pulled in $210 million in a new funding round led by SoftBank besides TaxiForSure and Savaari in the VC funded basket. Global player Uber is also fast expanding and has recently added its low-cost service. These aggregators also compete with fleet owning ventures Meru and EasyCabs among others.
Previously, a few cab sharing firms including RideInSync and Cubito pivoted to B2B employee transportation management solution providers.
(Edited by Joby Puthuparampil Johnson)