With latest funding, car rental start-up JustRide plans to enter 12 new cities by 2015 end
Rising population of motor vehicles comes with its own set of problems. Traffic congestion and unavailability of parking are the major concerns in today's time. To solve this problem and provide easy life to masses, car rental service firms come to rescue as they offer an innovative solution to this predicament, as multiple customers use these cars.
In recent years, car rental services start-ups like Zoomcar, Cartisan, Revv, Carzonrent and many others have mushroomed to cater this problem. These start-ups are not only appreciated by masses, but they are also receiving huge amount of backing from the investors.
Recently, Mumbai-based car rental aggregator JustRide announced to raise an undisclosed amount of funding from angel investors, including ex-Canaan MD Alok Mittal, Toppr.com founder Zeeshan Hayat, Frankly.me's Nikunj Jain, Punit K Goyal, Anirudh Damani, Rohit Chokhan, Palaash Venture and Niraj Singh of Spinny. The venture will use this fund towards building technology excellence, hiring, and spreading footprints to more cities.
Commenting on the new deal, Niraj Singh, CEO, Spinny, said, "With JustRide, it was their technology that sealed the deal. There are a number of car rental services coming up in India, but most of them focus only on services. Their asset light model and Smart Vehicle Technology (SVT) will definitely help them from the perspective of scalability."
Conceptualised by alumni of IIT Bombay and NIT Allahabad - Ashwarya Pratap Singh, Hemant Sah, Abhishek Mahajan, Vasant Verma, and Amit Sahu. JustRide is a next generation technology aggregator in the car rental industry with the prime products being mirco and macro leasing of vehicles.
Through its web and mobile-based service network, company links and facilitates transactions between vendors and consumers. Unlike existing market players, JustRide is not the proprietor of the vehicles it rents. The company leases vehicles from individual vendors by providing them a minimum guarantee value. JustRide's economic model complements the existing ecosystem, guarantying fixed return to all stakeholders.
The company is currently conducting a massive test of its in-house Smart Vehicle Technology (SVT) in the cities of Mumbai, Bangalore, Pune and Gurgaon. SVT taps into a vehicle's electronic system and provides a real time access to the location and performance parameters of the vehicle, ranging from tyre pressure to the current load on the engine and the G force experienced on each of the individual suspensions.
"For any technology to survive, it is essential that it evolves with the need of the market. We have begun field-testing of our technology in 4 cities. We shall start evaluating the results within a month. So far, we have applied SVT for vehicle tracking, maintenance and our hyperlocal home delivery model. If the results are positive, which we're quite sure of, the technology shall be used to generate a customer index, which would help us with customised products and offers based on the driving pattern and frequency of bookings," explains Amit Sahu, brain behind the company's revolutionary Smart Vehicle Technology (SVT).
How it works?
The company's revenue model is based on the concept of shared economy, where instead of individual ownership, an asset is shared by a group of consumers. Its micro-leasing service lets customers' book vehicles only for the duration of their journey. The car is then returned to the company's service station and allotted to the next customer in line.
As a technology aggregator, JustRide procures cars from existing vendors in the market by paying them a Minimum Guarantee Value (MGV) over the monthly EMI of the vehicle. All vehicles and passengers are pre-insured and maximum liability of the customer in the event of any damage to the vehicle is Rs 3,000 only.
"The business of car rentals relies heavily on operations. Setting up a hyperlocal service model in this sector is more expensive as compared to logistical services and other e-commerce services. Each vehicle has to be manually checked every day to ensure optimum performance," said Sahu.
Since commencing operations in April, this year, JustRide has generated over 1,200 transactions in the city of Mumbai alone. The company expanded to Bangalore, Gurgaon and Pune this month and is doing a brisk business, generating over 25 transactions per day.
JustRide has ambitious plans of expanding to 12 cities by the end of this year with a fleet of over 1,500 cars. Tier II cities such as Indore, Nasik and Surat are also on the company's radar. The company shall soon switch to a profit sharing model in which the company shall retain a certain percentage of the generated revenue, while the rest is retained by the vendor.
If we talk about the current market scenario in car rental space, investors have backed many start-ups. The most recent one is Bengaluru-based automotive services marketplace firm Cartisan that raised an undisclosed amount in its seed round of funding from Global Founders Capital; Yuvraj Singh's YouWeCan Ventures; TaxiForSure Co-Founder Aprameya R and others. Similarly, Revv had also raised a seed round last week from McKinsey and others. Last month, Zoomcar raised $11 million in funding; whereas, Carzonrent raised Rs 80 crore from Sidbi Venture Capital, WestBridge Capital and others.