Update: Zoomcar told us that it has not raised any funding currently and neither is it in talks to raise funding. The company did, however, confirm that David Back has quit the company.
Previously: Self driving car rental company Zoomcar has raised approximately $5 million in an interim funding round from existing investors, reports ET. The report also mentions that apparently Zoomcar’s co-founder David Back has left the company. We’ve written to Zoomcar to confirm this and will update once we hear back.
Earlier this week, Zoomcar launched operations in Hyderabad with ~30 cars at 6 different locations, which the Hindu reported to be mostly around Hitech city and Gachibowli. The report added that Zoomcar would add over 1,000 cars in around 100 locations in the city.
In October last year, the company had raised funding worth $8 million from Sequoia Capital, with participation from new investors former Infosys CFO Mohandas Pai and Manipal Group’s head of corporate affairs Abhay Jain. In 2013, Zoomcar had raised $200,000 from angel investor Raj Kumar Elango, $30,000 angel funding from former US treasury secretary Larry Summers and $215,000 from Empire Angels New York, Lady Barbara Judge among other angel investors.
Following last year’s funding, existing investors Empire Angels, FundersClub, Basset Investment Group and funds advised by Triangle Growth Partners had also increased their stake in the company. The company had then planned to use the funds to hire talent and invest in technology. The company also had plans to expand to Hyderabad, Mumbai, Delhi, Chennai and Goa over the next one year. The company had also planned to expand its then fleet of 250 cars to over 1,500.
David Back had cofounded Zoomcar with Greg Moran in 2012. The company was part of Microsoft Ventures Accelerators first Accelerator Plus batch that graduated in May last year.
How it works
The company basically allows users to rent cars on an hourly, daily, weekly or monthly basis and is currently operating in Bangalore, Pune, Delhi NCR, Hyderabad, Mumbai and Chennai. After booking a car online, a user needs to pick it up from a chosen location. While returning, the process is the same. The user does not need to fill fuel (unless it is a long drive where users can pay for fuel and the company reimburses that amount; however, it is not clear whether the company issues a complete or partial amount) or bother about insurance and taxes.
In its fleet currently are vehicles like Ford Figo, Honda Amaze, Honda City, Ford Ecosport, Mahindra Scorpio, Maruti Ciaz, Tata Safari, Mercedes GLA and Tata Nano among others. A Business Standard report states that Zoomcar buys 75% of its cars through bank loans while leasing the rest from companies like Avis Budget Group.
Note: A previous version of the article carried a different headline. The current version carries the factually correct the headline. We regret the error.
Photo credits to the author