By Anirudh Jain
Mahindra has invested INR 176 crores in Zoomcar India and in Zoomcar, Inc, its parent company, which is situated in the United States of America. While the deal will give Mahindra 16% stake in the business, Zoomcar will use these fresh funds primarily for expansion across India, improving their Internet of Things (IoT) based technology, and increasing their marketplace model.
Mahindra: Investing in future of mobility
Mahindra and Ford had formed a strategic alliance in 2017. The areas of the partnership were mobility programs, connected vehicle programs and many more. Mahindra’s areas of interests include multi-modal transport solutions, urban mobility and electric vehicles. By investing in Zoomcar, Mahindra is proving to be instrumental in shaping the future of shared mobility solutions.
These two companies are no strangers to one another. Last year the two came together to introduce electric vehicles in the shared mobility space. E2o plus, Mahindra’s electric vehicle, is available on Zoomcar’s platform in Mysuru, Banglore and Hyderabad. Currently, there are only 50 electric vehicles but Zoomcar expects to add 500+ electric vehicles by 2018.
Zoomcar: The Airbnb of vehicles
There has been a gradual shift in the essence of the word ‘possession’. While earlier, possession entailed ownership of physical goods, now it entails possession of experiences. Millennials are adopting this so-called “sharing economy” where everything from houses to cars is shared. That’s where Zoomcar comes in. Their target audience is millennials who want to experience the pleasures of driving without the hassle of owning the same. Thus, Zoomcar is aligning its business models to match their target audience’s behaviour. Initially, Zoomcar owned their own fleet of vehicles and are now expanding to a marketplace model via their Zoomcar association program.
The ZAP program
Under this program, the company does the heavy lifting of all the paperwork, insurance and other allied tasks, and the car is delivered right to your doorstep. The owner just has to pay for the EMI, and that can also be significantly reduced if the owner agrees to lease his car out.
To complement this, Zoomcar introduced their car analytics software, Cdabra, which will transform cars into IoT-enabled vehicles. This will track, record and send various points of information to the owner like fuel levels, harsh braking, inconsistent acceleration, engine health and many more. This will elevate the ownership experience and save costs while at the same time reducing accidents.
ZAP will significantly reduce the fixed overheads that are incurred due to owning and managing their own fleet of vehicles. Only a few months old, ZAP is now 1/3rd of Zoomcar’s fleet.
Two-wheeler vehicles’ position
Zoomcar recently entered the bike hailing space, similar to China’s Ofo and Ola. Their service is available in 10 cities and has already clocked 500,000 transactions. This has fueled the company’s ambitions for Pedal to be present in 100+ locations including tier-3 cities and those cities where car rental is unlikely to enter. By entering these Pedal only cities, Zoomcar sees an opportunity to sell complimentary services.
The gamble in ZAP, new products, and strong user growth has made this company EBITDA positive. This will catapult the company’s plan to enter Africa and Southeast Asia by the end of 2018.
Featured Image Source: Pexels
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