Deal focus: NGP diversifies across modern mobility

As internet-enabled cars get smarter, urban lifestyles and service marketing models are evolving with equal speed. The result is a mobility space in which technological disruption is happening under the hood and outside of the garage altogether.

Nokia Growth Partners (NGP) has hedged its bets in this environment by backing European car sharing marketplace Drivy, US in-vehicle Wi-Fi systems provider Zubie and China's Ganji, an online classifieds portal with a focus on used cars. The firm is also participating alongside Ford Motor Company, Sequoia Capital and Empire Angels in a $24 million Series B round for India-based vehicle rental service Zoomcar.

The country's $4 billion rental car market is fragmented, known for poor customer experience and traditionally dominated by corporate leasing businesses that only offer shuttle services with hired chauffeurs. Zoomcar claims about 70% market share for the growing self-drive niche.

NGP led an $11 million round for the start-up last year, building on a relationship sparked in 2013 when the firm first identified an opportunity to bridge its experiences across car connectivity, marketplace platforms and technology-enabled business models in transport, mapping and travel. "Zoomcar operates at the intersection of these spaces, and we seek to bring value through relationships with key global players, understanding of market dynamics and knowledge of relevant technology trends and growth strategies," says Anupam Rastogi a principal at NGP.

The new capital will go towards the 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. ZAP has been tripling its roster of car-owner associates every month since launching earlier this year and is expected to sign up about 2,000 associates by the end of 2016. The company's total fleet is expected to include 25,000 cars in 25 cities by 2018.

Greg Moran, Zoomcar's co-founder and CEO hopes to realize these goals through substantial investments in marketing - which has so far depended mostly of word-of-mouth - as well as technological advancements that leverage NGP's automotive background. "If you look at their portfolio, they have done things within hardware, software and middleware, and that's helpful because it's about tying those different strands together to create a value proposition for the customer," Moran says.

Meanwhile, Rastogi highlights ZAP's potential in the context of expectations that India will lead a six-fold expansion in the global car sharing market over the next 10 years. "Private vehicles sit idle for well over 90% of the time, and represent a depreciating asset for owners," he says. "Customers are realizing that they can use on-demand car rental solutions to reduce their transportation costs while maintaining the convenience."

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• Topics
• South Asia
• Technology
• Early-stage
• India
• TMT
• Transportation
• Sequoia Capital