Rental car platform Zoomcar eyes US listing as travel reawakens

Zoomcar Inc. is considering a listing in the US within 12 months to tap markets beyond its home base of India and as coronavirus-related health concerns bolster demand for car rental.

“There’s a lot of momentum in the public markets for this type of story," Zoomcar Chief Executive Officer and co-founder Greg Moran said in an interview on Friday, adding that a listing via a blank-check firm or special purpose acquisition company was also a possibility. “We’ve been at it now for a long time so it’s only fair to want to bring liquidity into the system for early investors."

Established in 2013, Zoomcar allows users to rent cars by the month, week, day or even hour. As Covid-19 ebbs in some parts of the world, more people are willing to travel but want to avoid public transport. The Bangalore-based group expects to generate over $100 million in revenue this fiscal year through March, a figure that will more than double next year to about $203 million, Moran said, declining to elaborate further on the company’s finances.

Early backers include Sequoia Capital, former US Treasury Secretary Larry Summers, Mahindra & Mahindra Ltd. and Ford Smart Mobility LLC, a unit of Ford Motor Co. that invests in new mobility services. In 2018, Zoomcar rolled out a shared subscription model whereby users can rent out their car if it’s sitting idle. Zoomcar’s fleet numbers around 10,000 cars across 45 cities in India.

Zoomcar is taking advantage of investor appetite for auto-related startups. US-based Getaround Inc. and Turo Inc., a peer-to-peer car sharing company from San Francisco, are both considering public listings to strengthen their balance sheets as leisure travel resumes. Stock in venerable car rental company Avis Budget Group Inc. is up almost 120% this year.

“This is the perfect time," Moran said. “Against the backdrop of Covid there are a lot of inherent tailwinds, which is really helping us capture more of the consumer mindset and gain market share. People want to get out and travel, they want to be social again. We’re seeing remarkable tendencies toward domestic travel where you’re taking a car, and that’s where our personal mobility solution holds significant possibility."

Zoomcar, which dominates the self-drive car rental market in India, plans to expand to Southeast Asia and the Middle East this quarter, Moran said. Places like Indonesia, the Philippines, Vietnam, Egypt and Saudi Arabia also have very low levels of vehicle ownership but large, upwardly mobile populations.

That “screams out you need this service because there’s simply no vehicle accessibility, and affordability is a huge constraint, just like India," he said.