It might seem that India already has too many on-demand taxi services: Uber, Ola, TaxiForSure … So one more may seem like too many. But when you look at the large numbers of people in the metros who still struggle to find taxis in peak hours, the many cities which still don’t have the new smartphone-based cab services, and the congested roads which discourage people from taking out their own cars, you begin to see that the gap has hardly been filled.
Sequoia obviously thinks so because it just put money into Zoomcar, a car rental startup that allows customers to drive themselves. Founded by Americans Greg Moran and David Back in Bangalore last year with just seven vehicles, it now has over 250 cars at 40 locations across Bangalore and Pune. Like Ola and Uber, Zoomcar too rides heavily on technology. All the booking and payments happen through the web or Zoomcar’s mobile app. But it offers neighborhood-based vehicle locations to simplify pick-up and drop-off.
“The opportunity here is astronomical. Around the world, our business model thrives in ultra-dense cities with low rates of car ownership. By 2030, India will have 68 cities with populations over 1 million, while all of Europe only has 35 such cities,” Zoomcar co-founder and president David Back says in a statement announcing the latest funding round of US$8 million.
The investment led by Sequoia comes at a time when Zoomcar is planning to expand to Delhi, Mumbai, Hyderabad, Chennai, Goa, and other Indian cities.
“Zoomcar has broken many conventions. David and Greg are determined entrepreneurs who moved to India from the USA to usher in a new era of self-drive,” says Shailendra Singh, managing director of Sequoia India. “They are seeing incredible demand and have had to turn away customers 89 weekends in a row. We think they have a shot at changing the rules on car ownership in India. We are delighted to support them in their endeavor to disrupt the traditional car rental market through a hyper-local car sharing model.”
Sequoia is already a major investor in Ola as well.
Investors have been betting big money on startups tackling the transportation bottlenecks in India. Uber, which began its India journey in Bangalore, now operates in nine more cities. Ola just raised a whopping US$210 million series D round of funding from Softbank, Tiger Global, Sequoia, Steadview, and Matrix. Last month, TaxiForSure raised US$30 million in series C funding from Accel and Bessemer.
Besides Sequoia, individual investors like former Infosys CFO Mohandas Pai and Abhay Jain of the Manipal Group have also put money into Zoomcar. Earlier, it had raised a round of US$3 million in funding. Lawrence H. Summers, former US treasury secretary and former president of Harvard University, and Professor Ed George, Chair of the Statistics Department at Wharton, are two of the early angels in Zoomcar.
See: India’s Zoom gets extra $1 million seed funding to accelerate car rental business
Ola-backer Sequoia now funds Zoomcar’s hyper-local self-drive car rental disruptor for India
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