Taking on the giants: India’s Jugnoo acquires taxi app to battle Ola and Uber

Age is just a number, truly, in the startup ecosystem. Today, India’s Jugnoo, an eight-month-old startup that has apps for both auto rickshaw rides and food delivery, announced the acquisition of three-year-old cab aggregator BookMyCab. The deal size is undisclosed.

Jugnoo runs three apps – Jugnoo Autos, Jugnoo Meals, and Jugnoo Fatafat. The Jugnoo Autos app, started in November 2014, is like Uber auto rickshaw rides. The other service is Jugnoo Meals, launched in February, which offers home delivery of freshly home-cooked food with a rotational menu. The meals are cooked by Jugnoo’s in-house chefs and are delivered within 30 minutes of placing the order.

Jugnoo launched Jugnoo Fatafat in April, a hyperlocal ecommerce marketplace for home delivery of fresh groceries.

New region, new category

The startup secured US$5 million in seed funding from Snow Leopard and PayTM last month to scale and expand. With this acquisition, it wants to get a faster entry into bigger cities like Mumbai, Delhi-NCR, Chennai, Bangalore, and Pune, as well as entering the taxi aggregation space.

“The definition of middle class has been redefined in today’s times. Fatter pay-checks and time constraints wash the guilt off taking a comparatively expensive means of transportation- taxis,” says Samar Singla, co-founder and CEO of Jugnoo, an engineer from Indian Institute of Technology.

Singla is a serial entrepreneur who previously founded accelerator Click Labs, and Prodigy Foods, a venture focusing on providing organic poultry feed.

According to Singla, BookMyCab, which has 2,000 cabs in Mumbai alone, got its license before Ola and Uber.

“Getting a licensed player onboard should tip the scale in our favor,” he says. Singla predicts the acquisition can help them reach 10,000 daily transactions shortly. However, that’s a tiny drop compared to the likes of Ola and Uber.

Consolidation ahead

Ola acquired TaxiForSure earlier this year to gain a larger share of the market.

Last year when the cab aggregators in India entered a price war, Sunil Goyal, founder and CEO of early stage VC fund YourNest, one of the investors in BookMyCab, said, “We [BookMyCab] have been extremely consistent. While the segment is presently in the build out stage, we will surely be one of the leaders in consolidating the market.”

BookMyCab had acquired rival CabonClick, which focused on Hyderabad and surrounding areas in November last year. It was said to be in advanced talks to raise US$6 million but secured funding in a small round from Contrarian Drishti earlier this year. It’s not clear if the investors have made a cut with this acquisition. Tech in Asia has reached out to them and will update when we hear back.