Two-wheeler sharing business is receiving increased attention in the Indian market. The latest to make it to the news are two startups, Vogo and Bounce, which are now being backed by Sachin Bansal, one of the co-founders of Flipkart, through his newly formed organization, BAC Acquisitions. In what he calls treasury operations, the two startups have been provided with debt funding of $3 million each.
It has been reported that these funds will be deployed by these companies in buying the scooters. The cost of the scooters is indicated at around Rs 65,000. Obviously, this is the area that requires the maximum investment as far as the startups are concerned.
The business models of both the startups are similar: Customers can book the scooter from their mobile app and will be able to pick up the vehicle, use it and drop it. The process is automated. While Vogo follows the designated point for pick up and drop back, Bounce is more flexible with the locations.
As they deploy more vehicles on the roads, they can service more customers and the adoption rate will increase. Vogo has already received a proposal from ride share company Ola that it is willing to invest up to $100 million to fund the purchase of 100,000 scooters. These scooters may support the cab riders of Ola in reaching their last mile destinations and be integrated with the Ola app.
In the case of Bounce, the startup has targeted an amount of $50 to $70 million and the investors could be the existing investors in the company, Sequoia Capital and Accel Partners. A new investor, B-Capital, which has been floated by Eduardo Saverin, one of the co-founders of Facebook is also reportedly making an investment.