Bengaluru-based self-drive car rental company Zoomcar is in preliminary talks for an equal merger with its competitor Drivezy, which offers two-wheelers and cars on rent.
According to a report on Mint, the talks are still in an early phase. Three sources told Mint that the investors in both companies are likely to hold stakes in the merged entity. While Zoomcar has sought a valuation of around USD 350-500 million, Drivezy is looking to be valued at USD 400 million.
“If both companies are going to merge, the new ownership structure should be comfortable to each and every debt lender... All the assets and liabilities will be put on the table. And they (lenders) will approve any merger only when there is enough money to cover debt and its repayments," one of the sources told Mint.
Zoomcar has raised more than USD 100 million in debt and equity funding till date from strategic investors. It claims to operate over 7,000 four-wheelers and 300 electric vehicles on its platform. Its app lets users locate Zoomcar vehicles within their vicinity and pick them up. Zoomcar had launched its bicycle renting service Pedl in 2017 which it shut down earlier this year.
Zoomcar was started by American duo Greg Moran and David Back in 2013 in Bengaluru. Back, however, left the firm citing personal reasons in early 2015. It was reported in April this year that Zoomcar was in talks to raise around USD 500 million in a fresh funding round led by automaker Mahindra and Mahindra Ltd.
Founded in August 2015, Drivezy offers a platform that caters to customers at both ends of the spectrum i.e. vehicle owners and ride-seekers.
The company earns a 15-30% commission for every successful transaction. Last year, it clocked a GMV (Gross Merchandising Value) of USD 32 million, growing by 200% since 2017. It’s targeting a GMV of USD 80 million this year. Drivezy has raised a total of USD 32 million in equity financing from investors including Das Capital, Axan Partners, IT-Farm, Yamaha Motor Ventures, and Y Combinator, among others.
Last year, Drivezy also secured USD 100 Mn in an asset financing deal with which the company plans to induct close to 50,000 vehicles. The company also raised USD 20 Mn in Series B equity funding, led by existing investor Das Capital. Drivezy had raised USD 5 million via an initial coin offering (ICO) in 2018. It later turned to debt funding to grow its fleet of vehicles and set up a special purpose entity to raise and manage debt money.