Indian car rental company Zoomcar has secured an investment from private equity firm Sequoia Capital.
Zoomcar started in Bangalore in February 2013, with seven vehicles at one location, but now has over 250 cars at about 40 locations across Bangalore and Pune, with plans to expand to other cities in India.
“Zoomcar has broken many conventions,” says Shailendra Singh, managing director of Sequoia India. “David and Greg are incredibly driven and determined entrepreneurs who moved to India from the USA to usher in a new era of self-drive. They have built technology to make an incredibly user-friendly experience, with all bookings happening through the web or mobile app. With those characteristics, they are seeing incredible demand and have had to turn away customers 89 weekends in a row. We think they have a shot at changing the rules on car ownership in India. We are delighted to back them and support them in their endeavour to disrupt the traditional car rental market through a hyper-local car sharing model.”
Sequoia is being joined in this investment round by former Infosys CFO Mohandas Pai, Abhay Jain of the Manipal Group, and other strategic individuals. Many prior investors are also increasing their stake, including funds advised by Triangle Growth Partners, Empire Angels, FundersClub and Basset Investment Group. Zoomcar had previously raised USD3m.
A Lloyd Thomas, managing partner at Triangle Growth Partners, says: “We are continually impressed with the pace of Zoom’s rapid expansion and we expect this latest round of investment to turbo-charge Zoom’s already impressive growth. We are pleased to have supported the company from pre-launch to Series A, and we are looking to add to our stake at every opportunity.”
Zoomcar is unusual in the Indian car-rental space because it allows customers to drive themselves. Over 95 per cent of the industry is chauffeur-driven, and what "self-drive" options exist are largely in the unlicensed and unregulated informal economy.
“The opportunity here is astronomical,” says Zoomcar co-founder and president David Back. “Around the world, our business model thrives in ultra-dense cities with low rates of car ownership. By 2030, India will have 68 cities with populations over one million, while all of Europe only has 35 such cities.”
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