The car and bicycle rental company Zoomcar have raised up to Rs 176 crore from Mahindra & Mahindra the Indian multinational car manufacturer. Mahindra & Mahindra (M&M) today said it will invest up to $27.6 million in-car and bicycle rental firm Zoomcar India and Zoomcar Inc, its US incorporated holding parent company.
The deal specifies the fact that the investment of such a huge amount of Rs 176 crore when converted to common stock of Zoomcar Inc. ,would constitute approximately 16 per cent stake of the automotive major in Zoomcar Inc. This investment is a part of Series C round of funding worth $40 million (Rs 256 crore) which including the previous investors, the names of which the self-drive car rental startup didn’t disclose.
The startup ZoomCar was the first in India who discovered and focused on the need of self-driven rental cars, in comparison to other companies who were concentrated on chauffeur-driven rentals. It was founded by Greg Moran and David Back in 2012.
ALSO READ: Mahindra Group Invested 1.5 Crore in Finland Startup
The development of the latest investment comes a month after, Zoomcar had signed a term sheet with Mahindra & Mahindra and existing lead investor Ford Smart Mobility. Ford Smart Mobility is the startup investment arm of global automaker Ford Motor Company.
Mahindra & Mahindra and Ford had previously announced a strategic union to work together in areas such as shared mobility and connected cars. They also agreed on helping each other expand their presence in the Indian and overseas markets. Both of the car manufacturing giants have strong partnerships with Zoomcar.
Apart from the present funding, Zoomcar had previously received $60 million from the previous investors which include Ford, Sequoia Capital, and angel investors such as former chief financial officer and HR head of Infosys TV Mohandas Pai and former US treasury secretary Lawrence Summers.
Zoomcar which has over 200 employees and has the presence in 27 Indian cities is likely to use this funding in overseas expansion and business diversification.
As per the balance sheet, the rental company posted a total revenue of Rs 121 crore and loss of Rs 100 crore for the financial year 2016-2017.
Relating to the investment by Mahindra & Mahindra, the co-founder and chief executive officer of Zoomcar, Greg Mohan said,
“Our collaboration with Mahindra dates back to 2013 when we first kicked off in Bangalore.”
The current investment makes ZoomCar value around $172 million (Rs 1,100 crore).