Zoomcar — an on-demand car rental startup in India — raised a $40 million Series C round led by the OEM Mahindra & Mahindra with participation by Ford Motor Co., the startup announced late last week.
Zoomcar is now valued at around $170 million, according to Mahindra & Mahindra, which bought a 16% share in the startup for approximately $27.5 million. Zoomcar was founded in 2013 by Americans Moran and David Back and is currently present across 29 cities in India. The startup has 2.7 million registered users and 3,500 cars. Its customers have completed more than 1.1 million trips to date, according to a published report.
Ford initially invested in Zoomcar in 2016, Michaela Johndrow a spokesman at Ford, told Auto Finance News.
“We are happy with our partnership and have no further updates to share,” Johndrow a spokesman at Ford, told AFN. Additionally, the investment is not tied to Ford Motor Credit in any way, Margaret Mellott, spokeswoman for Ford Credit, told AFN.
The startup offers Zipcar-style rentals, allowing registered users to find and use cars in a city. The company has also added the Zoomcar Associate Program (ZAP), which allows new car buyers to lease their vehicles out when they aren’t being used. Getaround and Turo, two U.S. based peer-to-peer carsharing startups, have also implemented this model. It helps buyers recoup the cost while allowing Zoomcar to grow its inventory without the high cost of purchase.
Moran said in the published report that while demand for ZAP purchases reached 25,000 to 30,000 people, “a combination of India’s ‘byzantine’ car financing landscape and state-level red tape, meant interested customers were forced to wait months for their car which most weren’t prepared to do.”
In response, Zoomcar has since modified its business to also provide a subscription service that allows users to pay up in advance for access to a personal car for a six- to 24-month period.
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