Indian car rental startup Zoomcar plans $100m bet in Southeast Asia

Car rental startup Zoomcar claims to be the market leader in the space in India, which is estimated to be worth US$2 billion. The company is now targeting Southeast Asia: It plans to invest more than US$100 million in the next two to three years, but that number could increase significantly over time as it looks to “dramatically ramp up” its presence in the region, Zoomcar told Tech in Asia.

The company expects to raise the money for this investment through proceeds from its upcoming initial public offering (IPO) in the US in the next 12 months. Zoomcar is looking to raise a “nine-digit million number” in US dollars from its listing.

Photo credit: Zoomcar

Zoomcar’s co-founder and CEO Greg Moran told Tech in Asia it is also considering a direct listing through a merger with a special purpose acquisition company (SPAC).

Earlier this month, Zoomcar announced that it was entering Southeast Asian markets such as Indonesia, Vietnam, and the Philippines as well as set up shop in Egypt.

The startup also plans to increase its headcount in Southeast Asia. But for now, Zoomcar has installed small teams with around 10 to 15 members – including country managers – in each of the four markets that it recently launched in.

It will initially roll out its car rental core offering in these areas. Other services such as Zoomcar Mobility Services, a suite of mobility software solutions for enterprises, will be eventually available.

Zoomcar expects that Southeast Asia will contribute up to 40% of revenue in the next financial year. This would mean a revenue of around US$80 million from its business in the region, as the company aims to grow its revenue to US$203 million within the same period.

Zoomcar CEO Greg Moran / Photo credit: Zoomcar

The car rental platform believes that it doesn’t have any “direct competitors” in Southeast Asia since it’s focused on being a customer-to-customer (C2C) marketplace.

Even as Zoomcar is confident about its latest foray, the region does have some players that offer a comparable range of services.

For instance, there is Malaysia-based car-sharing startup Moovby, which entered Indonesia in 2018. The peer-to-peer platform has more than 200,000 registered users and 10,000 registered vehicles at present. The company recorded at least 3,000 bookings in July, hitting what it says are pre-Covid levels. Indonesia accounted for more than 70% of its sales, according to a recent DealStreetAsia report.

Other similar players in Indonesia are Trevo by Socar and Share Car by ASSA. They’re all competing in a car rental market that is projected to reach US$393 million this year and US$788 million by 2025, a Statista report found.

Salvaging its position in India