Ex-McKinsey professionals raise seed round for Revv- a self drive car rental company with doorstep delivery
For the large pool of Indian middle-class, owning a car has always been a matter of pride and a status symbol. But, over the last couple of years, things have changed dramatically. The younger generation does not hold on to the notions that their parents had and this is causing a lot of change in the way things work, especially in urban India. Today, in Bangalore or Delhi, it is pretty common to see self-drive car rentals being picked up by people for short weekend trips or sometimes for moving intra-city as well.
Starting Revv and the model
The trend comes in from the West where self-drive car rentals are pretty popular, one of the biggest success stories being Zipcar. Closer home, Zoom Car has raised a huge funding round and has been clocking up the miles. In the midst of all this development, Anupam Agarwal and Karan Jain, two experienced professionals with an experience of a decade each at McKinsey, have set up Revv. They describe their model to be a mix of Zipcar and Dominos. Yes, they home deliver the car to the user. Till now, the self-drive car rental companies have had parking lots from where a user picks up the car but Revv wants to make this bit easier as well.
“Doorstep delivery is a global first: no other car rental company does this on pure-play basis. This model has some very significant implications,” says Anupam. He claims difficulty in finding/reaching the rental company’s parking lot is the biggest deterrent that customers cite against self-drive car rentals.
The other differentiator in terms of the model is unlimited kilometres, to bring the product closer to a ‘my private space that I can use as I like’ notion, as opposed to a ‘taxi that’s metering my kilometres’ notion.
Behind the scenes
As a junior partner with McKinsey, much of Anupam’s work was to do with hardcore execution at automotive manufacturing plants. He has also served a couple of automotive OEMs on product development and marketing, which has partially been the reason behind his passion for cars and bikes. Co-founder Kara has had a similar kind of experience in the oil and gas space and in overseas companies. Gaurav Gupta (BITS Pilani and IIM-C) and Srijan Sanket (IIT-D and IIM-C) are the other two members of the core team at Revv.
For Anupam and Karan both, it had been a while into their corporate journeys, and they had toyed with the idea of starting up earlier but never went into it head first. So, they add, it was about time. “We shook hands over a marathon lunch that lasted over five hours. Given the past chemistry, mutual trust and similar aspirations, it was fairly straight forward,” says Anupam about the story behind starting up.
Given their clear intent, the company has already raised a seed round. Investors include the newly hired CEO of Myntra, more than ten directors and partners from McKinsey (including the heads of logistics and automotive practices), the CEO of a national cable TV distribution company, senior executives from an investment fund, and a German soccer professional. With a fleet of about 50 cars, the company launched operations in NCR on July 27.
The market
The segment is huge, there is no denying that. “India has two crore cars on road. To put things in perspective, US has 15-20 lakh cars in self-drive rentals alone,” says Anupam. And the trend is just picking up in India with self-drive cars. Anupam gives his own example. “I own a BMW but the utilisation is so little that I'm effectively paying Rs 200/km on it. This made it clear to me that there are several people who want to use ‘good’ cars for specific periods of time, but purchasing them might not always be a financially prudent call, and a time-share/self-drive concept can enable a wider set of people to access such cars,” he adds.
The other worry with India is that it is hard to find a reliable car-chauffeur combination. Anupam remembers an instance when he was part of a group which was stranded at five am because the car didn’t turn up. This makes a huge case for self-drive cars.
Talking more of the market, Anupam adds, “Even if we apply all kinds of adjustments/factors, a market of two-three lakh cars in five to seven years is very realistic, and will amount to a an annual revenue pool of USD three to four billion. Importantly, this is a product that can create its own use cases”.
Portfolio and the vision
Revv’s portfolio of cars includes 60 per cent SUVs (three to four models), 10 per cent ultra-luxury (two to three models), 30 per cent sedan and hatchback (three to four models). The short term vision is to popularise the notion of self-drive car rentals in India, and to make the market really take-off through a product that mimics the privacy and convenience of one’s own car.
In the long run, all car rental companies take on private car ownership, through a communal car-share concept, to build a future where people do not have to buy cars to be able to use them.
What do you think? We’re already seeing instances where people are finding their cars to be redundant, what are your thoughts on the trend?