Mahindra participates in $40m round for India's Zoomcar

Mahindra & Mahindra – part of Mahindra Group, the country’s leading manufacturer of utility vehicles, tractors and electric cars – will take a 16% stake in Zoomcar on a fully diluted basis. The investment is part of the company’s push into the shared mobility business. It implies a valuation for Zoomcar of approximately INR11 billion.

Founded in 2013, Zoomcar provides self-drive car rental services in 30 cities, with users making bookings through an app that also enables mobile activation of vehicles. Last year, it introduced bicycle-sharing services and Zoomcar Associate Program (ZAP), a car-sharing service that lets people buy cars on behalf of Zoomcar, list them for rent on the platform and earn a share of the monthly rental fees.

Also in 2017, the company announced a partnership with Mahindra that has seen electric vehicles added to the Zoomcar fleet in three cities. At least 500 more Mahindra e20Plus cars will be introduced across 20 cities in the first half of 2018. The overall Zoomcar fleet – including conventional and electric cars – is expected to surpass 25,000 vehicles this year.

The company received three seed rounds involving Basset Investment Group, Empire Angels, Funds Club and Sequoia Capital between February 2013 and May 2015. Nokia Growth Partners then joined Empire and Sequoia in an $11 million round announced in July 2015, and the same three investors re-upped in a $24 million Series B led by Ford Motor Company in August 2016.

“At Mahindra, we are playing a pioneering role in the shared mobility business and are looking forward to an impetus in it through this investment in Zoomcar. We are confident that this partnership with Zoomcar will help further our vision to transform mobility in the country, thereby creating a more connected ecosystem,” said Pawan Goenka, managing director of Mahindra & Mahindra, in a statement.

Mahindra Group generates $19 billion in annual revenue from interests ranging from automotive and defense to financial services and real estate, although more than 80% comes from automotive and farm equipment. It sold more than 506,600 vehicles – over half of which were passenger vehicles – and 263,000 tractors in the 2017 financial year.

Mahindra is India’s only manufacturer of electric vehicles, with the e20Plus hatchback, the eVerito sedan, the eSupro minivan and panel vans, the e-Alfa Mini electric rickshaw.

Investment in India's technology-abled transportation market has largely focused on ride-hailing and taxi services. Last year, India-based Ola – Uber’s direct competitor in the domestic ride-hailing market – received a $1.1 billion round led by China’s Tencent Holdings at a valuation of $4.1 billion. The company was in talks with other investors to raise a further $1 billion.

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• Topics
• South Asia
• Expansion
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• India
• Growth capital
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• Sequoia Capital
• TMT