Eight months after pivoting from bicycles to electric scooters, dockless bike sharing platform Mobycy is finalising a $10-million Series A funding round to bankroll its growth plans.
Gurugram-based Bycyshare Technologies Private Limited, the company that owns Mobycy, has received term sheets from a clutch of venture capital and strategic investors, a company official told TechCircle.
The company, said co-founder and chief executive Akash Gupta, has already started signing term sheets and expects to dilute 30-40% of its equity in the upcoming $10-million round. “The investors are a mix of local and global investors from the US and Southeast Asia. We are signing term sheets as we speak,” he said.
German investment banking firm IEG has been signed up to advise Mobycy on the fundraising process.
The company’s existing investors -- startup incubation platform Venture Catalysts and a bunch of angels -- are also expected to participate in the round. Mobycy had raised an undisclosed sum led by Venture Catalysts in November last year.
Pivot to a million rides
When Gupta, who formerly led marketing at mobile wallet Mobikwik, and co-founder Rashi Agarwal started Mobycy in 2017, the plan was to enable short-distance commuters to rent bicycles via an app on their smartphones. The app allowed users to locate bicycles around them, unlock the bikes by scanning a QR Code, ride them and then park the bicycles at their destinations. A GPS device on the bicycles would enable Mobycy to track their locations.
The plan was simple enough but had its limits. “We acquired 250,000 users but soon realised there were problems using bicycles because of uncertain weather conditions, terrain and road infrastructure. Also, the last mile distance is slightly longer for the Indian commuter which is why we switched to electric scooters,” Gupta said.
Commuters can avail of Mobycy’s electric scooters using more or less the same process as the bicycles. But, the shift to scooters has significantly changed the way the company operates at the back-end. It makes its own scooters, branded Zypp, instead of buying them off the market as it did with bicycles. The company had developed a proprietary design for the scooters and manufacturing is outsourced to independent vendors.
“We currently have 300 Zypps running and will soon move to 3,000 in the short term. The plan is to put 100,000 scooters on the road in the next one year,” said Gupta.
Mobycy’s scooters are currently available in Noida, Gurugram and Hyderabad. It does 1,500-2,000 rides daily with its current fleet and wants to get to a million daily rides in the next 12 months. The company makes money by charging on the basis of the number of hours that a scooter is used. “After unlocking the scooter, we charge Rs 1 per minute. So, generally, our rides are 20 minutes (long). Rs 25-30 is our average ticket size per ride,” he said.
In order to differentiate itself from the competition and add more revenues streams, Mobycy has partnered with restaurant aggregator and delivery platform Zomato. “Micro-mobility, which is what Mobycy does, also includes delivery and food delivery is another segment that excites us. We have tied up with Zomato which enables its delivery boys to use our scooters for food delivery. We are already in talks with Swiggy. There are other pilots and partnerships which are already running,” Gupta said.
Gupta claims that the shift to electric scooters has led to a surge in investor interest in the company. “That’s why we signed up IEG to close the Series A round. We already have incoming interest in our Series B round, and overall, we expect to raise $60-70 million over the next couple of years,” he said.
Deals in the space
In December, ride-hailing unicorn Ola invested $100 million (around Rs 720 crore) in scooter-sharing firm Vogo in a move aimed at diversifying its offerings.
According to Vogo, it operates the country's first automated pickup-and-drop scooter rental platform. It remotely tracks and monitors scooters in real-time, which in theory makes the vehicles Internet of Things (IoT) devices. It is currently operational in Mysuru, Manipal, Bengaluru and Hyderabad.
Last November, Bengaluru-based dockless scooter sharing platform Bounce acquired the assets of the Indian arm of Chinese cycle sharing venture Ofo, marking its entry into the bicycle sharing space.
Around 5,000 cycles belonging to Ofo India were rebranded into Bounce as part of the transaction.
Bounce initially offered motorbikes and scooters on rental primarily for urban commuters. It tweaked its business model to the dockless scooter sharing service but has continued to run its rental business. With the Ofo deal, Bounce now offers dockless bicycle sharing.