Vehicle and industrial equipment producer Mahindra & Mahindra and Ford Smart Mobility, a subsidiary of carmaker Ford, have agreed to invest $50m in India-based vehicle rental service Zoomcar, VCCircle reported today.
Zoomcar has signed a term sheet with the corporates for a deal that will value it at about $200m, and which is set to close in the next few weeks, according to two people familiar with the development. Mahindra will provide roughly $30m with Ford putting up the remaining $20m.
Zoomcar operates an app-based business model that allows users to rent a range of cars from hatchbacks to luxury sedans by the hour, day, week or month. The company takes care of insurance and permitting, and refunds fuel purchases.
A November 2017 report first touted the size of the deal and the involvement of Mahindra, which manufactures its own range of cars as well as power generation technology, tractors and farming equipment.
Mahindra formed a strategic alliance with Ford in September 2017 to explore areas such as electric vehicles, mobility schemes, product development and the expansion of Ford’s business in India.
Ford Smart Mobility led Zoomcar’s last round, reportedly investing $15m of the $24m it raised in 2016. Nokia Growth Partners (NGP), the corporate venturing arm of communications equipment producer Nokia, also took part in the round, as did Sequoia Capital and Empire Angels.
The company had previously raised at least $23m in financing from Sequoia Capital, Empire Angels, Innoven Capital, FundersClub, Basset Investment Group, funds advised by Triangle Growth Partners and NGP, which took part in its $11m series B round in 2015.