Mumbai based peer-to-peer cab aggregation startup, Drivezy, has raised $5 million in the first round of their Initial Coin Offering (ICO). The round saw participation from existing investors and HNIs based out of Singapore and Japan.
An ICO the amalagum of IPO (Initial Public Offering) and crowdfunding. It gives startups an alternative to raise money through cryptocurrencies (like Bitcoin and Ethereum). ICOs are unregulated and bypass norms (equity based crowdfunding) of raising money through VCs, as well as banks.
The company used RentalCoins 1.0 as its private cryptocurrency token. The tokens, built on ethereum blockchain, were developed by the firm to enable a fleet of collaboratively owned vehicles accessible to customers.
The Y-combinator backed startup runs a platform that allows car owners to rent their cars to the company which then rents it out to customers. The company claims to own more than 1,300 cars by more than 800 owners with over 500,000 registered users.
In the recent ICO, Drivezy’s investors were given a pre-token sale which entitles them a part of the company’s physical assets (in this case, vehicles). For the current round, company sold 3 million tokens pegged at 0.00141 ETH per token.
In October last year, the company had raised $10 million in part equity, part debt financing deal. The equity investment was made by American and Japanese investors, which included the likes of Das Capital, Axan Partners, and IT Farm. While Mahindra Finance, ICICI Bank, Cholamandalam Finance and Shriram Finance invested another $5 Mn in the venture through debt funding.
Founded in April 2015 by Ashwarya Pratap Singh, Hemant Kumar Sah,Vasant Verma, Abhishek Mahajan, and Amit Sahu, Drivezy has partnered with Unocoin, an Indian Bitcoin exchange platform, to accept BTC mode of payment.
The company started the facility of paying for vehicles through cryptos but discontinued it in sometime citing high costs.
In the cab aggregation space the company competes with heavily-backed players like Uber, Ola, Zoomcar, Carzonrent, among many others