Exclusive: Bike rental startup ONN Bikes gets seed funding
Mumbai-based bike rental startup ONN Bikes has secured an undisclosed amount of seed funding from Grace Capital Ventures and four other individual investors.
The startup, operated by Motorcruizer Technologies India Pvt. Ltd., will use the funds to set up hub stations in Bengaluru and Hyderabad, Namit Jain, co-founder of ONN Bikes told Techcircle. These stations refer to pick up stops where the firm will house its bikes for delivery. Besides these centres, ONN Bikes will also use the investment to obtain licenses from the state transport authorities, "There is a lot of cost involved in getting the licenses.
Currently we have four states licenses. We have again applied for another three states licenses," Jain explained.
Furthermore, the startup will upgrade its technology database so that hub station owners can keep track of all bookings, whether upcoming, ongoing or completed, on a single platform.
ONN Bikes began operations in May 2016 and was founded by Jain, a chartered accountant and former executive at PricewaterhouseCoopers, and Shanky Munoth, a former Infosys executive and the startup's technology head.
ONN Bikes offers its bike rental services via an app to businesses and end consumers. For enterprises, the firm leases bikes to logistics companies, food tech start-ups and other businesses. These firms can avail of long-term leasing options starting from six months to three years.
"We started in June 2016 and till mid October, we were only dealing with the B2B market. Our focus was to have certain revenues coming into the system to stabalise in the B2B segment, and then get into B2C, where lots of cash burning is involved. We tied up with companies such as Ecom Express, Swiggy, Ola and Uber, who take bikes from us on a lease basis," said Jain. He added that the firm has no plans to enter the bike taxi segment due to the regulatory hurdles. ONN Bikes so far has supplied 150 bikes to Uber and 125 vehicles to Ola.
Consumers, on the other hand, can hire all types of two-wheelers from non-geared scooters to high-end motorbikes on an hourly, daily and weekly rental basis. A user can order a bike through the app and have it delivered to his or her doorstep, or a bike can be picked up from a hub station. It only started its B2C services from mid-October.
Presently, ONN Bikes offers its B2B services in Bengaluru, Gurgaon and Hyderabad, while its B2C offerings are available only in Bengaluru and Rajasthan. It intends to launch its consumer services in Hyderabad by the end of January 2017.
ONN Bikes has received a commitment of 2,000 bikes on a lease basis from the Bajaj Group and other financial institutions, of which it has a steady pipeline of 700 bikes that can be deployed in the next few months. It also intends to introduce electric bikes and a ride sharing feature.
The bike rental startup was incubated at Z Nation Labs and has previously raised $100,000 in angel investment from Pushpamitra Das, corporate CFO of the Bombay Dyeing Group; Shailesh Mehta, vice president at an international bank; and Z Nation Lab.
Other players in the bike rental space are Bengaluru-based Wheelstreet raised Rs 3.4 crore in seed money from Broadbean Capital in March this year. Hyderabad-based Tazzo secured seed funding worth Rs 1.5 crore (around $227,000) from DSG Consumer Partners in October this year.
Z Nation Lab was launched in April this year by Anup Mehta, an MBA from SP Jain Institute of Management & Research and director of Mumbai-based Vinay Unique, a real estate venture; Neha Jain, a marketing graduate from Mumbai University with experience in market research; and Khushboo Jain, a former Grant Thorton executive who was also the former CEO of Umang Financial Advisors. The accelerator invests between $50,000 and $250,000 in startups and takes an 8% to 12% stake in them.
Grace Capital Ventures was recently part of a seed investment round in healthtech startup Sidqam Technologies, along with Mumbai-based investment firm SQue Capital and Soham Vencaps.