Self-drive car rental company Zoomcar said Tuesday it has raised USD 30 million in its Series D funding round led by Japanese electronics giant’s investment arm Sony Innovation Fund, with participation from existing investors including Sequoia Capital, Trifecta Capital, and InnoVen Capital, among others.
Zoomcar had expected to raise USD 500 million in its Series D round but is now seeking USD 100 million as it realized investors are waiting for some consolidation to happen in this space. The Bengaluru-based company will raise another round of funding to the tune of USD 70 million as a part of its ongoing USD 100 million Series D round. Since its founding, the company has raised a total of USD 152 million from an array of high profile investors.
Formed in 2016, Sony Innovation Fund mainly invests in consumer and enterprise facing companies in the market including the US, Israel, Europe, and Japan. This is its first bet in India.
Zoomcar will use the recent fund to expand its reach from the current 45 cities it’s present in and grow its fleet 10x in the next two years to 100,000 vehicles. The investment will be used to enhance its technological capabilities and increase its subscription user base.
“With the growth of shared economy across the globe, subscription-based car ownership is becoming an increasing trend,” Zoomcar said in a statement.
Launched in 2013, Zoomcar allows users to rent vehicles using the app as per their convenience and pay for it online. In 2018, it launched a subscription model “ZAP” for users to rent vehicles at a fixed monthly fee for long-term use ranging from six to 36 months. This move ensured the company has a steady and expected source of income. During the subscription period, when the car is sitting idle, users have the flexibility to rent out their car on the Zoomcar platform.
With new players joining and expanding services in the shared mobility space the competition in India has increased. Last year ride-hailing giant Ola announced its entry into four-wheeler self-drive rental space. It said it’s aiming for a fleet of 20,000 vehicles by the end of 2020.
It competes with players such as Y Combinator-backed Drivezy, Carzonrent, Myles, and now Ola. Drivezy claims it has over 25,000 vehicles on its platform with a mix of two- and four-wheelers. The company is currently focusing on two-wheeler business deploying 60% of the company’s resources in two-wheelers and the remaining on four-wheelers.
Earlier this month it was reported that Zoomcar was in advance talks with its competitor Revv for a possible acquisition after its discussions with Drivezy failed.