Bengaluru-based self-drive car rental startup Zoomcar India Pvt. Ltd is in talks with both new and existing investors, including automobile major Mahindra and Mahindra Ltd, to raise $50 million, a financial daily reported.
Mint said, citing two people aware of the development, that while the discussions with Mahindra were in an advanced stage, two other new investors have also shown interest in the proposed funding round.
The startup seeks to expand its operations to more cities as and when it raises the fresh capital.
Zoomcar has a tie-up with Mahindra Electric to deploy the all-electric city smart car e2oPlus, besides two fast charging units on its platform.
If the proposed funding goes through, the car and utility vehicles manufacturer would become Zoomcar’s second investor partner from the automobile industry. In August last year, US auto giant Ford Motor Company’s newly created ‘smart mobility’ unit had led the company’s $24-million (Rs 161 crore) Series B round of funding.
VCCircle was the first to report on Ford’s investment in the firm in July 2016.
Zoomcar had 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.
While a Zoomcar spokesperson said that there was no information available on the development, an email query to Mahindra and Mahindra did not elicit any response till the time of filing this report.
In September, Zoomcar had 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.
It had previously entered into similar financing agreements with several companies, including BMW India Financial Services, Tata Motor Finance Ltd and Cholamandalam Investment & Finance Company Ltd.
The company was founded by US nationals Greg Moran and David Back, who worked on sustainability solutions. The firm follows a hyperlocal model, backed by a mobile app, allowing customers to pick up cars from designated locations. It launched operations in 2013 and had raised $11 million from Sequoia Capital, Nokia Growth and Empire Angels in July 2016.
In a recent interaction with VCCircle, Zoomcar CEO Moran had said that the company is betting on its marketplace platform Zoomcar Associate Programme (ZAP) and international foray for the next phase of growth.
ZAP allows users to buy vehicles on the company’s behalf and earn from them when they are not driving by renting them out.
“In most cities, we have achieved strong unit economics. Our marketplace ZAP has taken off well. Over 20% of our fleet is from ZAP, a number that will reach 25% shortly. ZAP yields even more profits since its cost structure is extremely efficient. As a platform, it leverages our core technology competency. You can cross-subsidise both parties,” Moran had told VCCircle in August.
With a strong presence across 24 cities, Zoomcar runs 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. It plans to expand to over 20 countries over thenext two to three years.
Since inception, it has completed around nine lakh trips and is looking to hit the million mark this quarter. According to the company, the average ticket size of each business is Rs 4,000-6,000.
The company competes with the likes of Carzonrent-owned Myles, Revv, Voler and Drivezy.