Automotive manufacturer Mahindra & Mahindra has agreed to acquire a majority stake in Meru Cabs, a taxi service backed by media group Bennett, Coleman & Co (BCC), LiveMint reported on Sunday.
The corporate will pay up to Rs 1.04bn ($14.5m) for 55% of the company’s shares, and has been given the option to buy additional shares from undisclosed existing investors for up to Rs 980m, which would increase the overall size of the transaction to $28.3m at current exchange rates.
Founded in 2007, Meru enables users to book car transportation across several Indian cities through a mobile app that includes a fare estimator. It operates four subsidiaries that will be integrated into Mahindra & Mahindra’s business.
Meru’s business has however been negatively impacted by the ascendancy of ride hailing platforms such as Ola and Uber.
The company raised $25m from Brand Capital, an investment arm of media group Bennett Coleman & Co, in 2016, after securing about $50m from development finance institution CDC Group’s India Value Fund Advisors unit the previous year.
CDC Group’s India Value Fund III and private equity firm True North had both provided undisclosed amounts of funding for Meru in 2007.