Peer-to-peer car and bike sharing platform Drivezy today announced that it has raised funding of $10 million, led by new and existing investors. This $10 million is in addition to the earlier $6 million raised from Y Combinator, White Unicorn Ventures, Dheeraj Jain, Punit K Goyal, Alok Mittal, Susa Ventures, Qasar Younis, Paul Buchheit, Kima Ventures, Justin Kan, and IT-Farm.
With this fund raise the total funding raised by Drivezy touches $10 million. With the announcement of this fund raise, the platform also announced the launch of its private Initial coin offering (ICO), focussed on the expansion of their peer-to-peer marketplace for cars and bikes.
The team adds it will deploy a major part of the new investment to create Rental Coins – a currency that will transform the global car-sharing industry. Ashwarya Singh, CEO and Co-founder, Drivezy says this fund raiser will be utilised to fast track their expansion into newer markets in India and also globally.
For their rental coins, Drivezy has partnered with the Bitcoin exchange company Unocoin to enable bitcoin as a mode of payment. Drivezy’s venture into ICO was announced in Japan at a conference hosted by the Japanese fintech company AnyPay, which has also invested in Drivezy.
AnyPay will provide Drivezy with ICO advisory support in terms of scheme structuring and token development. Shinji Kimura, CEO, AnyPay, says,
“Drivezy is building something more than a simple sharing business; they are building a system that can unify the global sharing economy. I chose to support them as I believe that they have the knowledge and skill to accomplish their vision.”
Ashwarya adds that with this technology, individuals can transact any value across the globe securely without the need for any intermediary. He believes that this will fuel the growth of collaborative systems where all resources are shared by members of the community. Also, with the rising cost of assets especially of that of transportation and housing, the future is moving towards a shared world.
“The world is moving on to a collaborative model of consumption and our mission is an aggressive journey to change the way people purchase, use, and sell motor vehicles,” he says.
Last year, the team came up with the idea of building a marketplace where individual car, and even two-wheeler owners could list idle vehicles and rent them out. The platform was rebranded as Drivezy and followed a peer-to-peer car sharing model. It was rolled out in Bengaluru, Mumbai, and Pune early this year.
Of the 880 cars listed on the platform, 10 percent is owned by Drivezy and had been acquired during its JustRide days. The remainder, which falls under the aggregator model, are on a peer-to-peer sharing model. With this new model, Ashwarya claims owners can earn close to Rs 30,000 per month.
The team is also working with NBFCs for financing arrangements. This includes a Tripartite Agreement, where the owner purchases a car, registers it on Drivezy, and the revenue generated goes to the owners. Typically, tour and travel company owners and operators find this model attractive.
Cars are rented for a period of a day to a week, and are charged between Rs 57 and Rs 117 per hour, says Ashwarya.
Speaking of the investment in a press release Morio Kurosaki, the President of IT Farm remarked that few startups today, appear at the right time, with the right team to up-end a large market, and Drivezy is part of that exclusive club.
Drivezy is also evaluating debt financing options, where owners finance the car and act as guarantors while the asset is registered with Drivezy. The revenue generated by Drivezy on renting the vehicle is used to pay off the loan. The team claims to make $950,000 in monthly GMV and $150,000 in monthly revenue.
Ashwarya believes that rental coins can potentially create almost 10 lakh micro-entrepreneurs who can supplement their household income by renting out their assets.
In terms of bookings, Drivezy claims around 20,000 monthly bookings, with over 2,300 pending requests. Customers and owners are both vetted by Drivezy through registrations. In case of accidents and damages, the driver bears the cost.
As car rental platforms gain popularity in India, Drivezy already faces direct competition from Sequoia-backed ZoomCar and Delhi-based Carzonrent. It also sees indirect competition from Ola Rental and Uber Hire. The car rental market in India is believed to be growing at 22.9 percent annually but is yet to find a foothold in Tier II and III cities.