Car rental startup has raised fresh investment of Rs 17 crore from Mahindra & Mahindra as part of Zoomcar’s Rs 256 crore series C funding round. With this investment round, the company gets valued at Rs 1,100 crore ($172 million).
Zoomcar has a tie-up and has signed a term-sheet with M&M and Ford Smart Mobility, the investor vehicle floated by Ford Motor Company with the aim of funding startups. The Zoomcar arrangement can be treated as part of a larger alliance that the global auto giant Ford and the Indian company M&M have entered into, to work together is specific areas, like connected cars and shared mobility and this arrangement may not be limited to the Indian market alone.
From the operational point of view, Mahindra has a better level of association with Zoomcar running many of the Indian vehicle maker’s SUVs and electric vehicles in its 3000-strong fleet.
Mahindra’s E20 electric car is already part of Zoomcar’s fleet in cities like Mysore, Bangalore and Hyderabad and an additional 500 E20s are likely to be seen on the roads, running under the Zoomcar flag. The two companies are also working on enhancing the population of recharge centers for the electric cars. Both M & M and Zoomcar put out statements expressing immense hope for the future of their association.
Mahindra has made this round of investment in Zoomcar, with part of the amount going to the parent Zoomcar Inc. via its own investment arm, Mahindra Overseas Investment Company (Mauritius) Ltd, with the provision to convert its investment in the operations arm to stocks in the parent company going ahead. Once this happens and the agencies accord their approvals, M&M may end up with an overall stake of around 16% in Zoomcar Inc.
Zoomcar’s operational model sees it offering cars to its customers who book online or through an app and they can pick up the vehicle from designated points. Some of the key investors in the startup include Ford, Sequoia Capital, TV Mohandas Pai, a former Infosys hand and Lawrence Summers, a former US Treasury Secretary. The company is in the process of expanding its operations and services not only in India but also in several countries overseas in Asia and Africa.