Meru Cabs is expecting to raise between $100 and $200 million over the next 18-24 months, said Siddhartha Pahwa, group CEO of the radio taxi company.
“The travel industry is expected to witness inflows of $ 1.5-2 billion in the next two years. We will draw money from IVFA (India Value Fund Advisors) or will raise money from investors as and when required,” he said.
Pahwa said in December and January the firm had achieved cash break-even. “Whatever cash we are generating we are ploughing back into the business,” said Pahwa explaining his strategy.
In FY15, Meru had reported R3.3.crore of net losses, which came down from R3.6 crore in the previous year. Meru clocked R280.6 crore in operating revenues and R33.1 crore of employee benefits expenses.
India Value Fund has a stake of more than 85% in Meru. The total assets under deployment for the private equity fund are valued at about $1.8 billion. “We are looking for a major investments, but no stake sale at this point of time. We will continue to grow this business in a profitable manner,” Pahwa added.
Following the emergence of Ola and Uber in 2014, Meru, which has been active since 2007, saw 20% drop in consumers as they migrated to cheaper cab companies. But over the last three-four months, Meru has seen a 5% rise although a larger share of consumers continue to ride with Ola and Uber.
Meru hires its drivers on contractual basis. Pahwa said that Meru remains profitable despite the competitive rates offer by Ola and Uber. Meru has a fleet of 32,000 drivers across the country and the salary of each drivers ranges from R20,000-30,000.
The cab company has 1,400 Meru cabs and 2,000 vehicles under its Meru Genie services.