Drivezy – The start-up outside of India that wants to switch private car use through a car-sharing network where people lend their cars and two-wheelers, but also have options to use vehicles from a fleet managed by Drivezy. – said it is raising more money as it prepares for the next stage of its expansion, including a launch in the US in the coming weeks.
The company is in the process of raising $ 100 million in equity funding, plus another $ 400 million in asset financing, the latter to help continue to build the inventory that sits alongside the vehicles provided by its users. This would technically be a Series C and is being raised at a valuation of $ 400 million, the company confirmed to me.
“Today” is the keyword: Ankur Sengupta, who heads business development for Drivezy, said in an interview that the startup will leave the round open for about a year and continue to ramp it up continuously, with the valuation varying accordingly. . “The valuation we are working on now is $ 400 million, but we will continue to accept investments, at different valuations,” he said.
(Note: this is not a completely new way to increase rounds, but in recent years, it has become much more common to see the “Series” blocks quite clear. Fast growing companies like Snap and more recently Grab in the southeast Asia has chosen this route to take advantage of the fastest and closest available financing when it is really needed.)
The company is not disclosing any names at this time, except to point out that it is likely to include a new large investor from Japan and that it also has investor commitments in the United States, Singapore, and China. Past sponsors have included Yamaha Motor Company, Axan Partners and IT-Farm, as well as Y-Combinator, where Drivezy was part of a 2016 cohort like JustRide, led by its five founders. Amit Sahu, Ashwarya Pratap Singh, Vasant verma Abhishek Mahajan and Hemant Sah. It has also been through Google’s Launchpad accelerator, although it doesn’t seem like Google is investing (yet).
Drivezy last raised money just three months ago, a $ 20 million Series B, when it also raised $ 100 million in asset financing. Along with users’ own cars and the fleet it manages, Drivezy also works in partnership with dealerships and others to provide vehicles for its inventory.
Between then and now, the company has seen tremendous growth.
The company receives more than 53,000 car reservations each month, compared to 37,000 / month just three months ago. Two-wheelers, primarily motorcycles, add up to nearly 30,000 more. While cars are normally booked for two to three days, two-wheelers are weekly or monthly.
Inventory has also gone up. There are currently 7,500 two-wheelers on the platform, with another 7,500 to arrive later this month; and 3,500 cars. (This is an increase of 5,000 motorcycles and scooters and 3,000 cars three months ago.) There are currently 30 dealerships and more than 25 banks and other finance companies in the Drivezy network.
Drivezy’s growth comes at what appears to be a key turning point for the transportation industry.
Some believe that the days of vehicle ownership in mature markets like the US are numbered, with several developments contributing to this trend: the rise of expensive self-drive cars that many will not be able to afford; the proliferation of affordable Uber-style services; and the rise of startups like Getaround (which will be a direct competitor to Drivezy when it comes to the US) and Fair to make it easier and cheaper to get a car ride without buying a car or using rental services old school car.
But in developing markets such as India, vehicle ownership is already a relative rarity, even if the desire to use a car is not: at present, only seven percent of Indians own a car and sixteen percent owns two-wheelers.
“That means the auto industry has been slow to grow here,” Sengupta said. (That, in addition to irregular public transportation in many urban areas, has also meant a lot of growth, by the way, for people like Ola.)
Drivezy’s response has been to create a completely new supply chain for the use of private cars and two-wheelers. Clients include people who cannot buy a car, those who do but would appreciate a little money to help pay off the loans they got to get them, as well as car companies and dealers who are looking for new avenues and models of cars. business to change. more vehicles.
Currently, the P2P side of the business is the most popular on the automotive side, where 70 percent of the inventory has been listed by private owners, while only 35 percent of two-wheelers come from private owners (all P2P vehicles get a “fitness check.” Most of the rest are listed as asset finance companies through SPV on a revenue sharing basis, with less than two percent on Drivezy’s own books. These, according to Sengupta, have been acquired to fulfill licensing obligations in India.
While Drivezy has definitely benefited from helpful market conditions – low vehicle ownership and a fast growing, tech savvy middle class with disposable income and more reasons to travel – the plan will now be to take its model to other markets, including those with conditions similar to those in India, as well as those that are more developed (and therefore more competitive).
That will include the United States, where the company plans to establish its first pilot projects in April to test demand in different markets and market segments, Sengupta said. While this is a very different market, and certainly more competitive when the likes of Getaround, Turo, Fair and others are taken into account, Drivezy (their founders after spending time with Y Combinator and Google’s accelerator) believes that there is a gap in the area of microcredit and the fact that even with many options already, there may be more.
“People have aspiration needs, they want better cars, BMWs and Audis, for example, and there are no companies tackling the problem of lowering the cost of renting these models,” Sengupta said. Considering that there is also a growing market for scooters in the country, it could also be an area that Drivezy will get involved in.
The pilot / expansion project in the US will come alongside the construction and contracting of an innovation lab in the country, a pattern that Drivezy will also follow when expanding in Asia as well. Other countries he plans to go to this year, he said, include Indonesia, Thailand and Singapore.
It’s not very often that I hear about startups outside of India expanding into the US, so in itself (in my opinion) it’s a great story about how the gravitational pull of the tech world has drifted away from Silicon Valley. Ultimately, international expansion to North America and other markets will serve a dual purpose for Drivezy. Not only will it help the company grow its business, it will put the company on the map, and that will also help attract more financial attention.