Car and bike rental startup Drivezy and self-drive car rental company Zoomcar are holding merger talks, according to a report published in Livemint. These unconfirmed merger talks marks what could be possibly the first consolidation phase in India’s urban mobility space.
Livemint cited unidentified source to claim that the talks are still in initial stage and the talks may not fructify unless lenders of both companies unilaterally agree to terms and conditions of the deal. The source also claimed that all the top investors in these two respective startups will continue to hold stakes in the new merged entity.
Zoomcar has been especially forthcoming about pushing the merger deal through share-swap agreement, according to another unidentified source.
Both Zoomcar and Drivezy declined to comment on the news report. E-mail queries sent by Techpluto did not elicit any response at the time of publishing this story.
Conventionally, two companies settle for a merger when cost of doing business rises dramatically and are unable to cope with growing losses. But merger can also take place in order to achieve long-term scalability amid challenging market situation.
Irrespective what is really propelling Zoomcar and Drivezy to merger talks, if this deal does go through then it will mark a new beginning in India’s urban mobility industry. But it should be noted that both these startups are decently funded and preassembly have enough reserves for carrying operation until the next funding round.
Zoomcar has so far raised more than $100 million through debt and equity funding. The company counts auto giants Mahindra & Mahindra and Ford among its many high-profile investors.
Drivezy, on other hand, has raised nearly $40 Mn from several investors including Y Combinator. It claims to operate above 15,000 bikes and nearly 3,000 cars on its self-drive rental platform.