Automotive manufacturer Mahindra & Mahindra has entered discussions to invest in India-based on-demand car rental service Zoomcar as part of a $500m funding round, LiveMint reported today.
The prospective round will consist of a mixture of debt and equity financing, according to two people aware of the development, one of which told LiveMint that Mahindra is set to invest between $300m and $400m.
Zoomcar runs a self-drive vehicle rental platform that enables users to book and rent cars through a mobile app. The service includes damage insurance and round-the-clock roadside assistance, and even includes fuel purchases in the cost.
The company claims to have about 4.8 million users and is operational in 29 Indian cities. It intends to channel a significant portion of the new funding into buying vehicles, according to one of the sources.
Zoomcar confirmed the news, telling LiveMint in a statement: “Zoomcar is in advanced talks to raise up to $500m of equity and structured debt from leading global financial investors.
“The expectation is for fresh investors to lead the round along with participation from existing investors. This transaction will close in the current quarter.”
Zoomcar has so far disclosed $87m in debt and equity financing altogether. Mahindra paid $27.3m to lead its last round, a $40m series C in February 2018 that included Sequoia Capital, Empire Angels and NGP Capital, the venture capital firm spun off by communications technology provider Nokia.
Carmaker Ford led the company’s $24m series B round in 2016 through its Ford Smart Mobility subsidiary, investing alongside existing backers NGP (then known as Nokia Growth Partners), Sequoia Capital and Empire Angels.
