India Value Fund commits $50m to taxi firm Meru

IVFA has invested around $75 million in Meru since its first committment in 2006. It is hoped that this latest tranche will better equip the company to compete against local rival Ola, which recently expanded its national footprint with the $200 million acquisition of TaxiForSure, months after raising $210 million from a Softbank-led consortium.

Established in 2007, Meru is the oldest of India’s app-based taxi firms and claims to be its largest by revenues. Unlike its competitors, the firm owns and operates its own fleet of taxis. Ola, TaxiForSure, and US-based Uber use their app platform purely to aggregate individual drivers, or very small-scale operators.

Meru’s traditional asset-heavy approach means it doesn't command the same kind of footprint as its competitors. The company has 12,000 cars in its fleet, while Ola and TaxiForSure now have a combined 85,000. However, in 2012 the company launched Meru Plus - where drivers can buy their own cars and subcribe Meru's platform - in a bid to decouple growth from capital expenditure.

According to LiveMint, Meru will use the new investment to promote its mobile app, add to its customer base, and expand its budget offering - Meru Genie - across the country. The business has also recently launched its Meru Eve service for female passengers in Delhi, with a fleet of 50 taxis.

Bangalore-based RedSeer Consulting estimates that in 2014 India’s taxi market was worth $9 billion, of which the organized portion accounted for around $500 million.

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• Topics
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• India Value Fund Advisors
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