Exclusive: Zoomcar may acquire Revv; Hyundai to invest in merged entity

Self-drive car rental startup Zoomcar is in advanced stages to acquire its competitor Revv, according to two people familiar with the matter. If this deal goes through, it will mark consolidation in a sector that hasn’t witnessed any activity over the last several months.

“The conversations are fairly advanced, but they are stuck at the share swap ratio,” said one of the two people cited above, requesting anonymity. “Revv wants one share for every three shares, and Zoomcar wants to give one share for every 4.25 shares.”

Entrackr couldn’t immediately ascertain the value of this deal.

This comes several months after a media report said that Zoomcar was going to merge with bike rental startup Drivezy. Sources say that the deal did not go through because Drivezy was not interested in taking it forward.

“A few months ago, SoftBank was interested in investing in Zoomcar, but the condition was that it had to either merge with Drivezy or Revv,” said another person familiar with the matter, requesting anonymity. “But Drivezy wasn’t too keen on the merger.”

While Entrackr is not clear whether SoftBank will invest if Zoomcar and Revv merge, the Masayoshi Son-led investment firm has been expressing strong interest in the self-drive car rental space. Sources say SoftBank has held several rounds of discussions with both companies in the past.

It’s worth noting that Drivezy and Zoomcar have been in the market to raise a large round for more than three quarters. However, they are yet to find backers who are willing to lead a three-digit round.

“Consolidation seems to be the only way forward to attract a large amount of capital,” said one of the sources cited above. Revv’s existing backer Hyundai is likely to invest if it merges with Zoomcar. 

Queries sent to Zoomcar and Revv did not elicit a response at the time of publishing this story. We will update the post once they respond.

The self-drive car rental space has been a two-horse race between Drivezy and Zoomcar for many years until October when Ola jumped into the segment through Ola Drive in Bengaluru. Due to its sheer network, Ola is expected to pose tough competition to the existing players. 

On the other hand, Revv appears to have fallen behind as compared to Zoomcar and Drivezy. Since chances of independent fundraising seem difficult, consolidation in the sector seems inevitable. 

Zoomcar last raised $40 million in February 2018 in a round led by automobile maker Mahindra & Mahindra. The company was founded by Greg Moran in April 2012. Revv last raised Rs 100 crore from Hyundai Motor in August 2018.

According to industry estimates, Zoomcar clocks about 1,00,000 rides a month. It claims to have 6,500 cars listed on its platform and five million registered users. Meanwhile, Drivezy has about 5,000 cars and close to 20,000 bikes available for rent.