Ola, Uber challenger Namma Yatri in talks to raise $10-15 million in its first funding round

Namma Yatri confirmed that the firm is in the process of fundraising however did not share more details.

Namma Yatri, a zero-commission ride-hailing app, is in the final stages of negotiations to secure approximately $10-$15 million in its inaugural funding round, several sources told Moneycontrol. This development comes shortly after the company was spun off from JusPay, a payment infrastructure firm backed by Softbank, which originally launched and managed the mobility venture.

“The firm is raising through the hived-off entity Moving Tech Innovations Limited…This is part of Namma Yatri’s plans to expand across India and improve their technology to support volumes as they are fast-growing,” a source privy to the information told Moneycontrol requesting anonymity.

According to two sources in the know of the developments, the firm is in talks with Blume Ventures, Singapore-based Antler and Google.

Namma Yatri confirmed that the firm is in the process of fundraising however did not share more details.

"We are fundraising, engaging with multiple investors who have shown a strong interest in our vision, approach and business. These discussions are ongoing. As of now, we have not finalized our investment round, and therefore, are not in a position to share specific details. We value transparency and will share updates once things progress," Namma Yatri's spokesperson said in responding to Moneycontrol's queries.

Blume Ventures denied such talks and Atler declined to comment on the developments. Google did not respond to Moneycontrol’s queries till the story was published. The story will be updated with comments later.

“Within a few days of launch, the firm can disrupt the market. Namma Yatri still needs funds to expand and develop its technology in terms of hiring, taking care of technology costs like cloud and map costs as well,” the source quoted above said.

Fintech firm Juspay, in collaboration with Nandan Nilekani's BECKN Foundation and supported by Bengaluru's Auto Rickshaw Drivers' Union (ARDU), launched the Namma Yatri app in November 2022. This app promises to be an alternative to Ola and Uber, which charge 30-40 percent commission.

On the 1st of April, Softbank-backed Juspay spun off the mobility business into a separate firm called Moving Tech Innovations Limited. Shan M S and Magizhan Selvan, who were part of JusPay, are currently leading the spun-off mobility business.

“This strategic decision empowers the mobility division to pursue its vision with enhanced agility and independence. This move will likely help Namma Yatri in raising funds from venture capital investors to develop infrastructure and technology,” Shan M S, Chief Growth Officer of Juspay told Moneycontrol while announcing the hive-off.

While JusPay has hived off the mobility business, it continues to be the majority investor in the ride-hailing firm.

Namma Yatri also became a part of the ONDC network, or the Open Network for Digital Commerce — a decentralized, network-centric model where buyers and sellers can transact, irrespective of the platforms/apps they use.

Interestingly, Antler India which is also in the list of investors to be looking to invest in Namma Yatri, recently announced setting up an exclusive platform to mentor and fund founders working with the government-backed Open Network for Digital Commerce (ONDC).

Expansion Spree

Namma Yatri was started as an auto-hailing app, however, on April 16 it announced its foray into cab services in Bengaluru, onboarding over 25,000 drivers on its platform.

As per the firm’s website, the driver’s earnings are presently at Rs 1.88 crores. It also has completed 1.2 lakh trips through its platform.

The ride-hailing market is presently dominated by players like Ola and Uber. Rapido is also seeing increasing market share. However, Namma Yatri’s subscription model has been in the spotlight.

Also Read: Ola, Uber and Rapido remove in-app wallet payments for auto-rickshaws to retain drivers, cut costs

In November 2022, Namma Yatri introduced the direct-payment model in Bengaluru, becoming the pioneer in this approach. Subsequently, other ride-hailing giants like Ola, Uber, and Rapido have expressed interest in adopting this model to circumvent GST charges on their services.

Originally launched as the Yatri app, Namma Yatri debuted in Bengaluru, Mysuru, Tumkur, and Kochi. In Kolkata, it was introduced as Yatri Saathi. Recently, the company expanded its services to Chennai, where it even facilitates 'metro-ticket' bookings through its platform.

Also Read: How Namma Yatri works: Can it break Ola and Uber's duopoly?

After a year of muted funding cycle, India’s startup ecosystem is witnessing a pick-up in early-stage and late-stage deals.

The Indian startup ecosystem recorded seven late-stage funding deals in March, as against two deals a year ago, data from analytics firm Venture Intelligence showed.