Self-drive car rental company Zoomcar has closed Series C round of $40 million led by its long-running partner Mahindra and Mahindra (M&M). The Indian home-grown auto major has also picked up a significant stake of 16 per cent in the Greg Moran-led company.
Apart from M&M, existing investors of Zoomcar also participated in the round. The funding deal had been pending for some time and earlier, it was speculated to be around $50 million, when both companies held talks pertaining to funds raising.
In its earlier rounds, the Bengaluru-based startup had raised around $45 million from Ford, Sequoia Capital, Empire Angels, Nokia Growth Partners and others.
Zoomcar will use the fresh proceeds to accelerate its marketplace supply growth, improve IoT technologies, and expand its product categories, reports ET.
Of late, both companies have been leveraging each other’s technology to expand their verticals in the Indian market.
In November last year, Zoomcar in partnership with Mahindra and Mahindra had launched electric vehicles (EVs) in Mysore. In the same month, Zoomcar partnered with Mahindra group’s e-vehicle arm to roll out 20 e2oPlus, Mahindra’s all-electric smart car, in the city of Hyderabad.
After five years of operation in India, the firm is also planning to expand its self-drive car rental service in newer cities like Chandigarh and Delhi as well as explore other Asian and African markets.
The Bengaluru-headquartered company is also betting big on Zoomcar Associate Program (ZAP), which allows people buy cars and lease it to Zoomcar for running it as a self-driven rental car, for the next round of growth.
According to Zoomcar, its ZAP major revenue stream model will help the company achieve its target. The company has witnessed a robust growth with its ZAP marketplace in 2017 as these vehicles now account for over 25 per cent of its 3,000 plus total fleet.
Over the next few years, the car rental company is targeting to spread its reach in 30 cities in India with a fleet of 25,000 cars for which its ZAP would account 85-90 per cent.
Apart from Vehicle segment, Zoomcar is also looking to grab the bicycle sharing model in India. The company had rolled out a technology-enabled bicycle sharing service called PEDL. In the first phase, the fleet offering started from Bangalore, Chennai, and Kolkata. The service currently operates across 10 cities with a fleet of more than 3,000 cycles.