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Last Updated : Sep 11, 2019 01:25 PM IST | Source: Mint

Steadview may lead fresh funding round in 2-wheeler rental startup Vogo

Vogo plans to use Ola Electric Mobility for battery swapping infra once it starts offering electric scooters. Vogo also raised Rs 25 crore in debt from Alteria Capital, which provides loans to startups, in June.

Representative image
Representative image

Hedge fund Steadview Capital is in talks to lead a $50 million funding round in two-wheeler rental startup Vogo, said two people aware of the matter.

Existing investors such as venture capital firms Matrix Partners, Stellaris Venture Partners and Kalaari Capital are also expected to participate in the round, said the people cited above, who requested anonymity as the talks are private.

“Steadview has had early conversations with Vogo for an investment, but it is still evaluating the viability and scalability of the sector,” said the first of the two persons cited above.

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Steadview did not respond to emails seeking comment sent on Monday. Vogo declined to comment.

Mint reported on 20 June that Vogo has mandated investment bank Avendus Capital to manage the fundraise process and scout for investors.

Mobility has emerged as one of the hottest investing spaces in India over the last few years, with applications across bike, scooter and car-sharing or rentals. This follows similar trends in the US and China.

Mint first reported on 24 April that Falcon Edge Capital, B Capital Group and Maverick Ventures are leading a $72 million round in Vogo’s rival Bounce, at a valuation of $200 million.

In scooter rentals, Vogo and Bounce are vying to be the market leader, claiming to do 50,000 and 60,000 rides a day each, respectively, according to a 1 August Economic Times report.

Founded by Anand Ayyadurai, Sanchit Mittal and Padmanabhan Balakrishnan in 2017, Vogo provides scooters and motorcycles on rent through its mobile application wherein users can pick up and drop the vehicles at dedicated places within a city. The service is currently available in Hyderabad and Bengaluru. Bounce, meanwhile, offers dockless rentals, which means that the vehicles can be picked up and dropped almost anywhere.

Vogo is also backed by ride-hailing firm Ola, one of India’s most valuable startups, due to their common investor Matrix Partners. Ola currently provides a credit line, through which Vogo uses debt to purchase scooters. This allows Vogo to seek lesser equity funding than rival Bounce, which is backed by Sequoia Capital and Accel Partners.

Vogo also raised Rs 25 crore in debt from Alteria Capital, which provides loans to startups, in June.

Vogo plans to use Ola Electric Mobility Pvt. Ltd, the electric vehicle spin-off of Ola, for battery swapping infrastructure once it starts offering electric scooters, said a third person briefed on the matter.

“Steadview is also an investor in Ola, Matrix’s biggest company, and hence Matrix is also driving the conversation for Steadview to invest,” the person said.

Steadview has also emerged as one of the most active investors in Indian startups this year, with investments in Dream11, BharatPe, ChargeBee and Zenoti, among others. Mint reported on 17 July that Steadview plans to invest $500 million in growth-stage companies in India over the next two years, with about $20-40 million per deal. Vogo has also held conversations with US-based Goldman Sachs, to invest from its balance sheet, the Economic Times reported on 10 September. A Goldman Sachs spokesperson declined to comment.

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First Published on Sep 11, 2019 01:24 pm
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