[Funding Alert] This Self-Driving Car Rental Start-up Will Ramp Up Its Growth Efforts With Newly Raised Funds
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Gig-economy is gaining popularity across the world and in India. With deeper penetration of technology and Internet, products ranging from house to car, from electrical appliances to clothes can now be rented easily using a smartphone. With mobility and commute being one of the most important needs for people, self-driving car rental has been gaining currency among consumers.
One of the leading players in the self-driving segment Zoomcar is ramping up its efforts to strengthen its presence in the segment. The Bengaluru-based start-up raised $30 million as part of its ongoing $100 million Series D funding round led by Sony Innovation Fund by IGV, the venture capital arm of electronics giant, Sony. Its existing investors also participated in the round.
This fundraise comes after the car rental start-up raised $4.8 million from its US-based parent company Zoomcar Inc. last month. Prior to this, Zoomcar had raised $7 million in a mix of debt and equity from its US-based parent entity Zoomcar Inc. and WeWork India head Karan Virwani.
Plans With The Fund
Founded by David Back and Greg Moran in 2013, Zoomcar allows users to rent cars in hourly, weekly or daily basis. Currently the company operates in more than 45 cities, including Bengaluru, Delhi, Mumbai, Kochi and Pune among others.
According to an official statement, Zoomcar will invest the new funds into growth, technology and data science. Apart from this, the company will also focus on enhancing an IoT layout in addition to its shared subscription service. It is also eyeing a deeper penetration in the Indian market.
Zoomcar’s primary target is to have over 1,00,000 vehicles on road in 18-24 months. Some media reports have also revealed that the company is also focusing on other growth avenues such as a shared subscription model which will allow users to rent cars for a longer duration (6 to 36 months).
Zoomcar also claims to have hit 15,000 car subscription run rate through its shared mobility platform in Q3 last year.
This development comes after the company recently launched “driver score” feature for the passenger car segment. Under this feature, the AI-powered algorithm with machine learning capabilities tracks the mechanical specs of the car being driven, driving style of the customer and identifies critical events of driving and then rates it on a scale of 0-100.
Self-Driving Market Sector In India
According to Statista data, the Indian car rental segment is expected to become $1,552 million market by 2023 and the user penetration is expected to grow to 2 per cent by 2023 from current 1.8 per cent.
The attractive market also saw ride-hailing Unicorn Ola to enter into the segment. In October 2019, Ola launched its self-drive car-sharing service ‘Ola Drive’. The service has been initially rolled out in Bengaluru and will be eventually expanded to Hyderabad, Mumbai and New Delhi. With this, users will now be allowed to book a car of their choice by paying a security deposit starting at INR 2,000.