In India, No Chauffeur Is A Status Symbol. Why ZoomCar Just Raised $8 Million

Photo Credit: PR, Screenshot

Photo Credit: PR, Screenshot

India’s ZoomCar has raised $8 million in Series A fundingled by Sequoia Capital, the company announced on October 31.

The high-tech Indian car rental company started in Bangalore in February 2013, with 7 vehicles at 1 location. It now has over 250 cars at about 40 locations across Bangalore and Pune, with plans to expand to other cities in India to Delhi, Mumbai, Chennai, Hyderabad, and others.

“In India, 95% of car rental is chauffeured,” ZoomCar’s president and co-founder David Back told Geektime. Avis is 100% chauffeured.”

“What ZoomCar allows you to do is rent a car and drive it yourself.”

Back explains that cars in India are very expensive, due to import taxes of 200%, while wages are low. This creates a situation where car rental companies prefer to pay a chauffer to look after their expensive asset rather than trust customers to drive it themselves.

But wages for drivers have been going up, in part due to Uber’s entry into India. As prosperity grows in the subcontinent, many people would like to drive themselves, without the enormous expense of actually owning their own car.

ZoomCar caters to this need, saying they are the first company to focus on self-drive and have found themselves turning away customers every week since they launched. As a result, they claim, their marketing costs are negligible.

ZoomCar also takes bookings online and offers iOS and Android mobile apps. The cars are parked in neighborhoods where customers live and work. They even offer a plug-in electric vehicle (REVA E2O).

ZoomCar’s investors include Sequoia, Mohan Pai from Infosys, and Abhay Jain from Manipal. Former Harvard President Larry Summers was one of the company’s angel investors.

The new land of opportunity

The company was founded by two American expats David Back and Greg Moran, two Ivy League grads in their 20’s who moved to India to take advantage of business opportunities in emerging markets.

1 2
View single page >> |

Disclosure: None

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.
John Fitch 6 years ago Member's comment

India is definitely a great market for an idea such as this; I do believe, however, that Zipcar was around prior to this and that is where Back and Moran got the idea? In any case, bringing this type of service to India was certainly a profitable venture.