Online driver aggregating platform DriveU has closed a mezzanine investment round of Rs 7 crore led by Stevens Creek Ventures. The investment from the California-based investor comes after eight months when DeriveU had raked in $3 million in its pre-Series A round.
For the uninitiated, Mezzanine investment round is a hybrid of debt and equity financing that gives the lender the right to convert to an equity interest in the company in case of default, generally after venture capital companies and other senior lenders are paid.
The Ramprasad Rahm Shastry-led startup will use the capital to increase its footprint in other cities. Currently, it operates in Bengaluru, Mumbai, Chennai, Delhi NCR, Pune, and Hyderabad.
Floated by Rahm, Ashok Shastry, and Amulmeet Singh in July 2015, DriveU offers a technology-driven, on-demand, affordable, private driver service.
With over 6,000 registered drivers on its platform, the startup claims to have crossed 6,00,000 trips since inception. Further, it has been planning to reach the figure of 10,000 drivers by the end of 2018.
The cross-utilisation of drivers between its B2B and B2C vertical, DriveU claims to provide better earning for them in the range of Rs 20,000 to Rs 30,000 and in some cases, it may go beyond Rs 40,000.
Meanwhile, DriveU also acquired three startups working in the same segment that includes DriversKart and Zuver in 2017 while CallAtHome in 2016.
Of late, DriveU offers in trip insurance under ‘DriveU Secure‘ scheme. The startup in partnership with Acko provides insurance to customers, and their vehicles, during the entire duration of the drive for a nominal premium amount from Rs 10 to Rs 40, depending on the type of car and trip.
In February 2016, Unitus Ventures had led a $1 million seed investment round in DriveU. Besides, Basu Ullagaddi, founder and general partner at Stevens Creek Ventures also invested in the Bengaluru-based startup is seed stage.