Bengaluru: Buoyed by the success of ride-hailing firms Ola (ANI Technologies Pvt. Ltd) and Uber Technologies Inc., investors are pouring funds into the next wave of mobility startups in India as urban transportation bookings move online. At least half a dozen new mobility startups—including Rapido, Ather Energy, Bounce and Vogo—are in advanced talks to raise large amounts of capital from investors, said several people familiar with the matter.
Investors hitch a ride on mobility startups in India
Metro Bikes, a rental startup for scooters and motorcycles that recently rebranded itself as Bounce, is in advanced talks to raise $10-12 million from IDG Ventures and Omidyar Network, said two people aware of the talks.
Bounce co-founder and chief executive Vivekananda Hallekere didn’t comment on the company’s funding discussions but said that transportation is a huge opportunity in India.
“India has a billion people and only 18% have access to personal mobility and the rest 80% don’t have access to personal mobility. It’s complex and needs localized solutions. Hence, scooter-sharing solution like ours are attracting large amounts of capital,” said Hallekere.
Scooter rental startup Vogo is in early-stage talks to raise $10-15 million from two new investors, according to two other people aware of the talks.
Rapido, owned and operated by Roppen Transportation Services Pvt. Ltd, is in discussions to raise $10-15 million in fresh funds, according to a fifth person aware of the talks. Rapido has previously raised capital from Hero MotoCorp chairman Pawan Munjal, AdvantEdge Partners and Astarc Ventures. All five people cited above requested anonymity.
Rapido’s co-founder, Aravind Sanka, declined to comment on the company’s fundraising talks.
“Mobility market is still at a nascent stage, with more than 300 million commutes happening and not even 1% is catered to by the platforms,” Sanka said. “We see huge opportunity for last/first mile and quick commute options where they save both time and money.”
Mint reported earlier this week that Flipkart’s co-founder and former chief executive, Sachin Bansal, is considering a move to invest as much as $100 million in electric scooter startup Ather Energy, after netting $1 billion from the sale of his shares in Flipkart to Walmart.
What makes the latest fundraising talks more noteworthy is that a number of these startups have already raised funds earlier this year. For instance, Bounce raised $12 million from Sequoia Capital and Accel Partners in August, while Vogo raised roughly $8 million from investors such as cab-hailing service Ola, run by ANI Technologies Pvt. Ltd, Munjal, Stellaris Venture Partners and Matrix Partners.
Vogo declined to comment.
The latest funding boom in the technology-powered, ride-sharing space has been fuelled by the realization that a majority of Indians who use two-wheelers are largely turning to technology and using new-age smartphone apps to fulfil everyday transportation needs. A recent report from the National Family Health Survey shows that nearly a third of all Indian households own a two-wheeler.
“With approximately 200 million two-wheelers on road, India is by far the largest market, globally, for motorcycles and scooters. Most middle-class Indians, even those who do not have a scooter, learn how to ride one at an early age. Even car owners prefer to commute by two-wheelers by a factor of 4 to 1. This makes India an ideal market for technology disruption on two-wheelers,” Ritesh Banglani, partner at Stellaris Venture Partners, wrote in a column for Mint on 3 September. Stellaris is one of the existing investors at Vogo.
The bike rental space has give rise to several early-stage ventures over the past two years. Last year, Bengaluru-based motorbike rental marketplace Wheelstreet raised $120,000 from US-based accelerator giant Y Combinator. Other similar ventures such as Tazzo and ONN Bikes have also attracted investor attention.
Even startups that are not in the business of two-wheeler ride-sharing are launching businesses to tap into the demand. Dunzo, a hyperlocal delivery startup, recently launched a bike service in Gurgaon.
Ola, which invested in Vogo earlier this year, has displayed more than a passing interest in expanding beyond cabs and becoming a one-stop platform for urban transportation that includes bike sharing and rentals.
“Our solution is solving major problems in the country like employment, traffic congestion and environmental impact. We recently crossed 1 million monthly rides and growing at 30% month on month,” said Sanka at Rapido.