India is expected to be the world's third-largest automotive market in terms of volume by 2026, according to the government’s ‘Invest India’ website. Our top three stories today suggest that homegrown tech startups will have a huge role to play in making this possible.
In today’s newsletter:
Bike-taxi firm Rapido raises $52 million amid recovery
Used car sales see technology-driven growth
Ola wants to make electric cars too, says CEO
Rapido raises $52 million as mobility sector continues to recover
Rapido, a bike-taxi platform, has raised $52 million in fresh funding at a time when India’s mobility sector is clocking a steady recovery following the second wave of the pandemic.
Valuation: The new round values the Bengaluru-based startup around $235 million, said a person with knowledge of the matter. This is its first fundraise since 2019 when it received back-to-back funding from Nexus and Westbridge Capital.
Who are the backers? Westbridge led the new round, chipping in about $30-35 million, said a source.
New investors Shell Ventures, Yamaha, Cred's founder Kunal Shah, Spotify India CEO Amarjit Singh Batra and Positive Moves Consulting also came on board.
Existing investors Hero MotoCorp chairman Pawan Munjal, Nexus Venture Partners and Everblue Management also participated in the financing.
The addition of Yamaha to the cap table is noteworthy, since the Japanese automaker has been investing in new-age mobility players globally and locally. In 2018, it put $150 million into Singapore's Grab Inc. In India, it has backed car rental platform Drivezy and used two-wheeler marketplace CredR.
Revenue mix: Bike taxis have been Rapido’s mainstay so far, contributing 60% of its total revenue. Auto services, and logistics and delivery contribute 20% each.
We only offer on-demand delivery to clients mostly in the food and grocery space… This segment was very small before Covid-19 but has more than doubled in the past year," Sanka said
Rapido facilitates deliveries for the likes of Zomato, Swiggy, BigBasket, Reliance JioMart and DotPe, among others. It also has a small presence in the customer-facing pickup-and-drop business, which is dominated by platforms such as Dunzo and Swiggy.
The company is currently operational in around 100 cities, servicing more than 15 million customers through over 1.5 million driver partners.
In other deals news
HealthifyMe has announced an equity buyback programme worth $12 million (Rs 90 crore), weeks after its Series C funding round. "Through this buyback, the company will provide liquidity to almost 100 of its key current and former team members who have played a significant role in its success," it said in a statement.
MyTVS, the auto parts and accessories subsidiary of TVS Group, has raised Rs 375 crore to scale its online-to-offline business and build its cloud-based digital infrastructure to become India’s largest B2C player in the automotive aftermarket space.
SleepyCat, a direct-to-consumer 'sleep solutions' brand, has raised $3.8 million in a funding round led by Saama Capital to step up its design innovation, while expanding manufacturing and distribution capabilities.
How technology is shaping personal mobility in India
Earlier this month Mr. Nair, a retired government employee in Ahmedabad, traded in his 14-year-old Maruti Suzuki Alto for a brand-new Maruti Suzuki DZire. The entry-level car, which he bought for Rs 2.4 lakh in 2007, fetched him Rs 75,000—a handsome payout for a vehicle that was largely in disuse.
Mr. Nair’s purchase underscores two trends in India’s mobility sector right now:
Used cars are gaining acceptance in a country where cars are an aspirational buy.
There has been a rebound in auto sales since the second wave of the pandemic ebbed.
RedSeer’s findings corroborated this. According to the management consulting firm, India’s used car market is likely to see significant growth in the coming years as it becomes organised, thanks to technology.
In 2019-20, Indians bought 1.6 used cars for every new car sold. That figure stood at 1.1 in FY16. The ratio stands at 2.6 in the US and UK.
Why the uptick? Online platforms—from CarTrade and Spinny to Digit and GoMechanic—are accelerating the digitisation of the entire journey of car ownership—search, financing, purchase and insurance, as per RedSeer.
