Sony Innovation Fund joins ongoing $100 mn Zoomcar growth round

Sequoia Capital-backed self-drive car rental startup Zoomcar has raised $30 million as part of an ongoing $100 million ongoing growth funding round from new and returning investors. Sony Innovation Fund by IGV, a venture capital fund backed by Japanese electronics major Sony Corporation among other investors, joined the round as a new investor.

Details on the other investors in the round remained undisclosed.

The latest infusion comes nearly two years after Bengaluru-based Zoomcar last raised a major funding round. It raised $40 million in February 2018 in a Series C round led by Mahindra & Mahindra.

Apart from Sequoia and Mahindra, Zoomcar’s earlier investors include Ford Motor Company, Silicon Valley Bank, Nokia Growth Partners, Larry Summers, Lady Barbara Judge, Empire Angels, FundersClub, Athene Capital, CyberCarrier, as well as angel investors from Harvard Law School, Wharton and Cambridge University's Judge School of Business. 

Founded in 2012 by Greg Moran and David Back, the company will deploy the fresh infusion to scale its data science capabilities to model out an IoT (Internet of Things) layout around the company’s shared subscription service.

“Zoomcar’s primary target is to have over 1,00,000 vehicles on road in 18-24 months and to continue to empower its customers with better mobility alternatives at scale,” the company said in a statement. The company currently has about 10,000 cars in its fleet. Its claims that its subscription peaked to a 15,000 run rate through its shared subscription mobility model in the quarter extending from July to September 2019.

The company currently operates in over 45 cities across India and claims to command over 90% of the market share in the shared subscription mobility model. In October last year, ANI Technologies, the Bengaluru based company that owns ride hailing platform Ola, launched its self-drive car-renting service Ola Drive in its home baser. It would have a fleet of 20,000 cars by 2020, it said at the time.

Another popular name in the space is Drivezy, a company with which Zoomcar’s share-swap merger talks had reportedly failed. Zoomcar is also reported to be in advanced talks with competitor Revv.

The fresh capital could provide much respite to the financial structure as losses continue to mount Zoomcar’s economics on a standalone basis. The company reported a nearly two times  increase in its FY19 losses.

Its losses widened to Rs 201.9 crore in the financial year ended March 2019 from Rs 116.4 crore a year earlier, the company said in its regulatory filings

The company’s total revenue rose about 69% to Rs 266.6 crore.

Advertising promotional charges, one of the company’s largest expenses propellers, increased to about Rs 54 crore from its year-on-year figure of Rs 13.7 crore.

The investment in Zoomcar marks Sony Innovation Fund’s first in India. Established last year, IGV or Innovation Growth Fund is a joint initiative between Sony and Daiwa Capital Holdings, an arm of Japanese investment bank Daiwa Securities Group. The fund also counts institutions such as Sumitomo Mitsui Banking Corporation, Osaka Shoko Shinkin Bank and Mitsubishi UFJ Lease & Finance Company among its limited partners.