The Pune-based bike rental startup, which operates on an asset-light approach, is set to raise funds from angel investors as it seeks to expand into newer geographies.
Boongg, operated by Onepoint Bike Services Pvt. Ltd, has finalised a Rs 2 crore (approximately $271,113 at current exchange rates) in funding from two angel investors, people aware of the developments told VCCircle.
The company has secured commitments for Rs 1.5 crore of the Rs 2 crore round and is expected to receive the remaining by the end of May. One of the investors is a real estate professional with experience in the transport industry, one of the persons cited above said.
VCCircle has not been able to ascertain the identity of the second investor.
The company will use the funds to enhance its technological platform, build the capability to launch electric bike services and increase its franchisees' network, the person added.
Boongg, founded by Yogesh Daga and Rahul Sarda in 2015, says it operates on a revenue-sharing model with franchisee and asset providers. This revenue model is based on the franchise-owned company-operated (FOCO) model.
According to its website, Boongg allows customers to choose the date of their rentals and the kind of bike they want to ride. It also charges no deposit and provides complimentary helmets for safety purposes. The company has a presence in parts of Maharashtra.
Deals in the bike mobility segment
The investment in Boongg is the latest example of a startup in the two-wheeler mobility space raising capital. Firms in the space are banking on factors such as the need for last-mile transport, higher penetration of bikes and lower costs compared to car rentals.
Earlier this month, the Wickedride Adventure Services Pvt. Ltd-operated Bounce raised $6.5 million (around Rs 47.29 crore) in funding from venture debt provider InnoVen Capital Pvt. Ltd. The funding came just weeks after the Bengaluru-based startup raised $105 million (around Rs 748 crore) in its Series D round.
Other firms that operate in the mobility space include Vogo Automotive Pvt. Ltd, which last month raised $19 million (around Rs 136 crore) in Series C funding led by LGT Lightstone Aspada. Existing investors in the company such as Matrix Partners, Kalaari Capital, and Stellaris Venture Partners also participated.
In August last year, the Roppen Transportation Services Pvt. Ltd-operated Rapido raised Rs 391 crore (around $54.6 million) in its Series B funding round led by private equity firm WestBridge Capital. Others that participated included BAce Capital and Shunwei Capital.