Meru Cabs, one of the earliest players in the taxi hailing space, on Monday raised $50 million from its existing investor India Value Fund Advisors, and is now on the verge of closing another $100-million round. Siddhartha Pahwa, CEO, Meru Cabs, told FE that the $100-million round would be closed by next month itself.
“We plan to raise another $100 million from a new set of investors, which will be closed by next month. We are in final discussions with some of the investors. These are large international hedge funds and VC funds,” Pahwa said.
He declined to name the new investors.
Meru Cabs, which was founded in 2007, operates company-owned cars, besides dabbling in the aggregator model, and plans to spend a chunk of the money in acquiring new customers, penetrate into new cities and promote its mobile app. The company is present in 20 cities at present and plans to double the count by the end of the year.
According to Pahwa, the increased focus on the mobile app will help Meru expand its customer base by the sheer virtue of convenience. Meru cabs will also partner with local players, which are mostly operational in single cities, to boost its supply chain.
“Meru had a very strong back-end technology and over the last one year we have started focusing on front-end technologies. Customers can see real time inventory and the availability of live data helps us deliver a vehicle in 15 minutes. The wallet feature available on the app helps in smoother closure of transaction,” he added.
Meru Cabs has a portfolio of about 15,000 cars, out of which about 40% are company-owned and the rest are operated through the aggregator model. Pahwa said the company will equally focus on both models to achieve a revenue of R1,200 crore in FY16. The company is likely to close FY15 with a revenue of R600 crore, a 50% increase from R400 crore in FY14.
The online taxi industry has witnessed a flurry of activities of late. Online taxi hailing service Ola recently acquired cross-town rival TaxiForSure for $200 million and is reportedly in talks with investors to raise about $120-150 million.
The acquisition happened after TaxiForSure started losing ground, especially after Ola raised $210 million from Japan’s SoftBank last October at a pre-money valuation of $660 million. In comparison, TaxiForSure put up a pale show, raising about $50 million from Accel Partners, Helion Venture Partners and Bessemer Venture Partners, including a bridge round of $6 million early January at a valuation of $125 million. Its last fund raising, a $30-million round, came in August last year. In comparison, Ola has so far raised $277 million from SoftBank, Tiger Global Management and Matrix Partners.
Ola, TaxiForSure, Savaari, Bookmycab and Zoomcar have so far raised $350-370 million together. Industry observers peg the domestic radio taxi market at $6-9 billion, even as the organised segment is likely to comprise only 4-5% of the overall market.
* Meru Cabs has a portfolio of about 15,000 cars, out of which about 40% are company-owned and the rest are operated through the aggregator model
* The company will equally focus on both models to achieve a revenue of R1,200 cr in FY16; likely to close FY15 with a revenue of R600 cr, a 50% rise from R400 cr in FY14