Bangalore-based self-driven rental car startup Zoomcar has struck a Rs 35-crore ($5.45 million) financing agreement with Ford Credit India Pvt. Ltd, the non-banking finance arm of automaker Ford India, to buy cars.
The agreement is for the purchase of about 400 cars, a Zoomcar spokesperson said in an email response to VCCircle queries. The startup has bought 58 Ford EcoSport cars against a loan of Rs 4.5 crore in August and September, the spokesperson said.
Zoomcar had previously also entered into similar financing agreements with multiple companies, including BMW India Financial Services, Tata Motor Finance Ltd and Cholamandalam Investment & Finance Company Ltd, according to the startup’s prior filings with the Registrar of Companies.
Ford is one of Zoomcar’s investors. In August 2016, Ford Smart Mobility LLC led Zoomcar’s Series B funding round of $24 million (Rs 161 crore), which also saw participation from existing investors Sequoia Capital, Nokia Growth Partners and Empire Angels. VCCircle had first reported on Ford’s investment into the firm in July last year.
Zoomcar also subsequently raised an extension to its Series B round in December last year, from Chinese venture capital firm Cyber Carrier CL. The company has raised a little over $50 million till date, according to data available with VCCEdge, the data and financial research platform of News Corp VCCircle.
Operated by Zoomcar India Pvt Ltd, the firm was founded in 2013 by US nationals, Moran and David Back, who worked with sustainability initiatives. The firm follows a hyperlocal model backed by a mobile app where customers can pick up cars from designated locations.
Currently present in 24 cities, Zoomcar has a fleet of 3,000 cars, a number which the company hopes to exponentially grow to 25,000 by 2018-19. The company also has a registered entity, Zoomcar Inc, in the US.
Since inception, the company has completed around 9 lakh trips and is looking to hit the million mark this quarter. According to the company, the average ticket size of each business that comes to them through consumers is Rs 4,000-6,000.
The company, which has been following an inventory model is likely to tilt more in favour of an asset light model, going forward. In a very interaction with VCCircle last month, Moran has stated that ZAP (Zoomcar Associate Program) will be one of the chief drivers of its next phase of growth.
ZAP, which was launched early last year, allows individuals to purchase vehicles on behalf of Zoomcar, list the vehicle on its platform, and then share the profits on a monthly basis.
According to Moran, ZAP, which currently accounts for 20% of its fleet, is expected to grow exponentially and account for nearly 85-90% of its fleet.
The company also has plans to go international and be present in over 20 countries over the next two-three years. The company will first look to expand into other parts of Asia and eventually enter Africa as part of its international expansion plans.
*This article has been updated to include Zoomcar’s response.
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