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Prominent self-drive car rental service Zoomcar is aiming to raise nearly $500 million in a new funding round that will be led by one of India’s largest automakers Mahindra and Mahindra group. It must be noted that the carmaker has also invested in Zoomcar in the past. In this new funding round, Mahindra will be making the majority investment although the current US-based investors of Zoomcar will also take part in the new funding round, however, the Indian automaker is expected to invest nearly $300 to $400 million in this fresh round. Mahindra had already pumped 176 crores in Zoomcar last year. Apart from the funding in the past, Mahindra and Zoomcar had joined hands to bring electric cars in the self-drive range a couple of years ago.
If things go Zoomcar’s way in the fresh round of funding the company could see itself being valued at nearly $1 billion after the fresh round of funding. The fresh round of investment could see the Bangalore based startup adding more cars to its fleet as the company has plans to increase its vehicle fleet by 3 lakh more units in the next couple of years.
When approached about the fresh round of funding, Zoomcar said the following to Livemint,
Zoomcar is in advanced talks to raise up to $500 million of equity and structured debt from leading global financial investors. The expectation is for fresh investors to lead the round along with participation from existing investors. This transaction will close in the current quarter.
Earlier, the Bangalore based startup had started a service wherein the users could subscribe to a Mahindra or Ford car and then could end up finally owning the car by continuing the same service. As far as the current funding status is concerned, the car rental service has already found investments to the tune of over $100 million so far. The fresh round of funding when successful will take make Zoomcar the second most funded car rental service in India as Ola has already shared its plans of entering the sector. Zoomcar currently has 7,000 cars that it rents out to users, apart from these the company also has nearly 300 electric vehicles in its fleet that mostly comprise of Mahindra e20 electric cars.
For people who are not aware of the services provided by Zoomcar, a user can book a car from the service through an app or the website and then the service delivers the car at the doorstep or asks user to visit the nearest lot to pick up their car. The payment for the services have to be made at the time of booking on the same online platform. As far as rivals for Zoomcar are concerned it currently faces competition from similar services such as Revv, Avis, CarzOnRent and the some other smaller services. However, the biggest rivalry in this segment will be seen when Ola enters the space. The company has already made the announcement for the same and is set to gain major investment from the South Korean carmaker Hyundai.