Bike-sharing startups have been catching investors’ eye for a quite long time as they are not only a disrupting business idea but also meet the mobility needs of Indian customers. According to a report, Indian bike-sharing startup companies have amassed nearly $138 million in 2018 as compared to only $2 million in 2016.
The rise in the funding depicts investors’ increased interest in upholding bike-sharing startups as they facilitate Indian masses to travel short distances and additionally, offer services at an affordable price in comparison to high prices charged by cab aggregators. These two strands along with a less count of players operating in this segment have enticed investors globally.
Raising Funding--a Way to Move Ahead
Recently, leading bike-sharing startups in India viz. Vogo and Bounce are searching for investors to amass larger funding than the previous ones. The ola-backed bike-sharing company, Vogo is in discussions with the US-based investment and financing firm, Goldman Sachs to close $50 million funding, the daily news, The Economic Times reported citing three anonymous people, who are privy to the matter.
Besides this, Bounce, which is a competitor of Vogo, is also planning to obtain $75 million from its existing investment companies viz. B Capital, Falcon Edge, Sequoia Capital, and Accel Growth, according to the cited media report.
Bounce, which is operated by Wicked Rides, was incorporated in 2014 by Varun Agni, Anil G, Vivekananda HR. The company renders motorcycles to customers under two plans that are: premium bikes under Wicked Rides brand and commuter motorcycles under Bounce banner.
So far, the company has raised equity and debt funding, in turn, reaching its aggregate funding to $94 million. Its investment companies are Maverick Ventures, Qualcomm Ventures, Sequoia Capital. Omidyar Network India, Chiratae Ventures, B Capital Group, and Accel Partners USA among others.
While the Bengaluru-based bike-sharing firm, Vogo which was incorporated in 2016 by Sanchit Mittal, Anand Ayyadurai and Padmanabhan Balakrishnan. The company renders scooter rental services to the customers all day and all night.
According to media reports, Tiger Global is in initial discussions with Vogo to infuse $40-$50 million. So far, the company has amassed $120.6 million in funding from various investment companies such as Matrix Partners India, Aprameya Radhakrishna, founder of TaxiForSure and Stellaris Venture Partners among others.
In December 2018, the Indian cab aggregator, Ola had joined hands with Vogo as a part of strategic partnership. As per the transaction, Ola infused $100 million in the bike-sharing startup and stated that the company wanted Vogo to add at most 100k new scooters. The firm is planning to turn 10 per cent of its fleet into EV (electric vehicle) and targeting to buy 100k scooters by the cessation of 2019.
The last-mile connectivity niche has a small chunk of players namely, Ola, Bounce, and Vogo, who are planning to get a wide share in the industry. Unlike this segment, the bike rental industry sees major players such as Tazzo Bikes, ONN Bikes, and Rapido, to name a few aggressively enticing consumers. Bike rental company, Rapido recently raised INR 391 crore in Series B round.
These consumer-centric segments are becoming a success now owing to the low price factor and facilitating customers in short distance travel.