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P2P car sharing app Drivezy raises $10 million; will launch ICO on November 1

Peer-to-peer (P2P) marketplace for car and bike sharing, Drivezy (formerly JustRide) has raised $10 million (Rs 65 crore) in an equal parts equity and debt deal, reports ETtech. The equity investment worth $5 million comes from Das Capital, and existing investors Axan Partners and IT-Farm, while the $5 million debt funding has been made by Mahindra Finance, ICICI Bank, Cholamandalam Finance and Shriram Finance.

Drivezy’s platform enables micro-ownership of personal cars. It connects vehicle owners with passengers looking for a ride. Passengers get access to a car at a fraction of what it would cost them to own it, and for owners it provides an opportunity to generate revenue or share the cost of owning the car. Drivezy had made the switch from a self-drive car rental marketplace to the P2P model last year. Currently, Drivezy has 1,318 vehicles listed across four cities – Mumbai, Bangalore, Pune and Mysore.

In its earlier avatar, Drivezy (then JustRide) had raised $3 million in bridge funding from Susa Ventures, Kima Ventures, Axan Ventures, SCM Holdings, IT-Farm, and Y Combinator partners Justin Kan, Qasar Younis and Paul Buccheit, in November last year. At the time, the company had said that the funds will be used for its car sharing platform, plus on Yabber – an IoT device for driving skills analysis – and to scale its fleet up to 2,000 cars from 300. It had also bee a part of Y Combinator’s summer batch in July 2016, and received $120,000 from the accelerator for a 7% stake in the company.

ICO plans

Drivezy has also announced that will be launching its Initial Coin Offering (ICO) at the end of this month (October 2017). In fact, it has already introduced bitcoin as a payment option on its platform, and has thus far processed over 150 bitcoin transactions, the company’s CEO Ashwarya Singh told ET.

Following the launch of the ICO, Drivezy’s investors will be able to purchase cryptographic tokens, which will make them eligible for a share in the revenue generated by the rental transactions on the marketplace. A total of 12.5 million tokens are up for sale at 0.00141 ETH (Ethereum), and one has to purchase a minimum of 12,500 tokens. At present, 1 ETH is equal to about $298.

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For the purpose of the ICO, Drivezy has launched RentalCoins, through which they plan to set up a “fleet of collaboratively owned vehicles that shall be accessible to all.”

How will this work?

  • Investors buy RentalCoins 1.0 and invest in a fleet of collaborative shared vehicles that will be operated by Drivezy.
  • Drivezy users rent these cars on the marketplace.
  • 95% of this revenue generated from these rentals will go to the investors and the remaining 5% to Drivezy, between the 1st and 5th of every month.

Japanese fintech company AnyPay is working with Drivezy for the ICO, especially in scheme structuring and token development. Note that AnyPay CEO, Shinji Kimura is also an investor in Drivezy.

Bitcoin in India

In April this year, the government of India had set up a committee to look into the circulation of cryptocurrencies. This committee was tasked to assess the following aspects:

(i) take stock of the present status of Virtual Currencies both in India and globally.
(ii) examine the existing global regulatory and legal structures governing Virtual Currencies.
(iii) suggest measures for dealing with such Virtual Currencies including issues relating to consumer protection, money laundering, etc.
(iv) examine any other matter related to Virtual Currencies which may be relevant.

We haven’t heard any updates regarding this since then. Apart from this Ministry of Finance committee, there’s also a Parliamentary Standing Committee on Finance which was (probably still is) looking into Bitcoin. While, in March, Reserve Bank of India (RBI) deputy governor R Gandhi said that the potential of virtual currencies, such as Bitcoin, is being overstated. “We can see that in these types of solutions for Virtual Currency, there is no central bank or monetary authority. They pose potential financial, operational, legal, customer protection and security related risks.”

Also Read: A beginner’s guide to understanding Initial Coin Offering (ICO)

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