Zoomcar to Raise $25 Million from Ford, Reliance
Zoomcar is on the brink of closing a round which will see a capital influx of $25 million, sources close to the deal said. Ford Smart Mobility, Reliance Venture Asset Management and Sequoia Capital will participate in the Series C round. The company had raised $11 million last year.
This is Ford’s first investment in India. The company will flush in $15 million with the remaining $10 million split between Sequoia and Reliance.
The car rental start-up, sources said, currently is on track to record a revenue of $25 million and is on the path to being profitable in several of its key markets. “Zoomcar is EBIDTA-level profitable in several cities. It is close to being country-wide profitable in the next three months,” said a source.
Zoomcar currently has over 1,500 cars on the road and sees occupancy of over 75 per cent. The company operates on a similar model to airport rentals in the US where parking lots are set up outside airports, customers fill forms and drive away to their destination. They are charged on a round trip basis or point-to-point. In India, Zoomcar allows just round trips but doesn’t set up just at airports.
When the company was started, it had expected demand from working professionals in metros for short distance travel but saw an unexpected demand from college-going youth who wanted a vehicle for short weekend visits. It made Zoomcar launch an ad campaign that encouraged its customers to use the vehicles for leisure as well.
The Bengaluru-based company saw interest from Ford’s venture capital arm, which was set up in March this year. Ford, which primarily has investments in auto companies, had announced that it will also focus on supplementary businesses complementing to its core strength. Ford Mobility, which is headquartered in Dearborn, has made a few interesting investments in self-driving cars and a mapping start-up.