Zoomcar raises fresh funds to compete with existing and new players in India

With a total of over USD 100 million fund infusion till now, it will have to compete with Ola as well.

Photo by Hitesh Choudhary on Unsplash

In its attempt to fight the increasing competition in India’s shared-economy, Bengaluru-headquartered car rental company Zoomcar has raised USD 1.98 million from its American parent entity, Zoomcar Inc, according to a local media citing regulatory filings made with India’s Registrar of Companies (RoC).

We have written to Zoomcar founder Greg Moran regarding company’s plan to use the recent funding.

Zoomcar has been on a fund-raising spree since the beginning of this year and has secured USD 9.8 million in 2019 both in equity and debt from various investors including Zoomcar Inc, Mahindra & Mahindra, Blacksoil Capital, Mahaveer Dwellers, and venture debt firm Trifecta Capital amongst others. Since inception, Zoomcar has raised over USD 100 million from a host of investors and High Net Worth Individuals including Indian industrialist Ratan Tata,

Earlier this month, ride-hailing unicorn Ola announced its entry into this space allowing users to rent out four wheelers for self-drive purpose similar to what Zoomcar and other incumbent players such as Drivezy, Carzonrent, Myles and others offer. Going by the media reports, Zoomcar is currently the market leader in the car rental space. It is soon going to re-launch its bicycle service ‘Pedl’ in India after shutting it down in December last year.

Founded in 2012,  Zoomcar has seen an increase in revenues as well as losses for the financial year 2018.  Its losses grew by 10.2% from USD 14.8 million in fiscal year 2017 to USD 16.4 million last year. It operating revenues stood at USD 21.8 million in FY 2018, showing an increase of 31% from USD 16.6 million in FY 2017. It claims to be present in 45 cities and running a fleet of over 7,000 cars.

Shared mobility startups are pushing all the right buttons prompted by millennials, who allegedly don’t view cars as an aspirational product to own. These new-age mobility services allow customers to book cars online and then pick and drop them up from a designated location. A few auto manufacturers have also jumped on the bandwagon and are offering an option of monthly rental instead of buying the car with a down payment.