Mobility startups have been bearing the brunt of the pandemic and for some mergers and acquisitions are the only way forward. One such firm is Bengaluru-based car and bike rental firm Drivezy. The company is in advanced stages to get acquired by Japanese two-wheeler maker Yamaha, said two people aware of the details of the deal.
“Yamaha has been in talks to acquire Drivezy for the past six months and it had given the terms for the acquisition early this month,” said one of the people requesting anonymity. “The size of the deal is likely to be in the range of $45-50 million.”
If the deal goes through, it would be the second consolidation in the mobility space. Toyota-backed Shuttl is also exploring merger and acquisition deals. On Monday, Entrackr had reported about Shuttl looking to wind up operations.
According to sources, Drivezy would continue to operate as an independent entity after the acquisition. As part of the deal, Drivezy’s co-founders will spearhead its operation in India and would also expand footprints to the African and MENA regions.
Queries sent to Yamaha didn’t elicit any immediate response whereas Drivezy’s co-founder and CEO declined to offer comment for the story.
Yamaha was in talks with Drivezy for investment for about 18 months, per sources. “The investment talks which was slated to value Drivezy over $125 million didn’t materialise due to the pandemic,” said the second source who also wished not to be named. “After falling out of the investment prospect, Yamaha proposed an acquisition offer to Drivezy with a 60% haircut on the original investment proposal.”
According to sources, the deal is likely to finalize in a month.
“The deal isn’t exciting for Drivezy’s investors as they have no upside, but they are likely to recover whatever they invested in the company,” said the person who is quoted at the beginning of the story.
As of now, Drivezy has mopped up close to $30 million across three institutional rounds. Its lead backers include Das Capital, Y Combinator, and White Unicorn Ventures among others. It’s worth noting that the company was also in talks with multiple investors including SoftBank and oil behemoth Shell.
However, these talks didn’t culminate into a deal for unknown reasons.
“About $30 million would go directly to Drivezy’s investors and the remaining $10-15 million will be used to get rid of debt and other liabilities,” said the second person.
Founded in 2015 by Ashwarya Pratap Singh, Hemant Kumar Sah, Vasant Verma, Abhishek Mahajan, and Amit Sahu, Drivezy offers peer-to-peer bike and car-sharing services. It was one of the early companies to raise funds through an initial coin offering (ICO).