SoftBank-backed JusPay hives off Namma Yatri, registers it as 'Moving Tech Innovations Limited'

JusPay Hives-off mobility business of Namma Yatri

The wheels of change are turning at Namma Yatri, the Ola and Uber challenger.

SoftBank-backed JusPay, a Bengaluru-based business-to-business payment infrastructure firm that launched and has operated Namma Yatri in Bengaluru since 2022, has spun off the mobility business into a separate registered firm called ‘Moving Tech Innovations Limited’.

“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.

Shan M S and Magizhan Selvan, who are part of JusPay, are currently leading the spun-off mobility business.

Fintech firm Juspay, in collaboration with Nandan Nilekani's BECKN Foundation and with the support of Bengaluru’s Auto Rickshaw Driver’s Union (ARDU), launched the Namma Yatri app in November 2022, promising an alternative to Ola and Uber, which they accused of charging around 30-40 percent commission.

“Juspay has hived off its mobility business, encompassing Namma Yatri and other mobility applications, into an independent entity named Moving Tech Innovations Pvt Ltd. This strategic decision empowers the mobility division to pursue its vision with enhanced agility and independence. Currently, Juspay is the lead shareholder in this new entity, continuing to support its growth and development” Shan said.

The new entity has been operational from March 1, 2024.

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

While JusPay has hived off the mobility business, Shan said that the firm continues to be the majority investor and said that JusPay continues to support the ride-hailing firm’s payment

“Namma Yatri operates on a Direct-to-Driver model, where customers pay drivers directly via UPI or cash, eliminating the need for payment integration within the app. However, we utilise the Juspay tech stack for collecting subscription fees from drivers. The exact investment amount by Juspay is confidential and cannot be disclosed at this stage,” he added.

Why hive-off?

Unlike Ola, Uber, and Rapido, which are platform-based apps that control all aspects such as pricing, commission, Namma Yatri isn’t platform-based. It doesn’t have the same licensing as the others either and customers can only pay cash to the driver or transfer the amount over UPI. No card-based online payments are allowed and Namma Yatri isn’t collecting any money to transfer to the driver later.

While this move was attractive, the app grew in size and currently has a completed trip 3.28 crores trips, with 57 lakhs registered users, and needed money to sustain operations.

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

The firm has been experimenting with subscription payments with drivers where the app will offer one ‘Daily Unlimited’ plan, at just Rs 25 per day, allowing unlimited rides, with the first free ride. Alternatively, the “Daily Per Trip” plan charges the drivers Rs. 3.50 per trip for up to 10 trips daily, with rides beyond that being free.

Also Read: Bengaluru: Ola Uber challenger Namma Yatri app to charge subscription fee from drivers

The hive-off is also an effort towards helping the app sustain itself as new VC investments can help enhance the app and user experience.

“Namma Yatri is in the early stages of its growth and requires investments with a long-term perspective. Juspay, established in 2012, is a mature business with strong growth potential ahead. Despite the hive-off, both companies will continue to collaborate in areas where there are synergies, leveraging each other's strengths to enhance their respective offerings and contribute to their mutual success,” Shan added.

In fact, Shan said that the firm has already initiated funding talks with external investors.

“We have just initiated fundraising conversations for the new entity. We will share more information in the future,” he added.

JusPay hive-off is also due to the difficulty to run both businesses, which are of different natures, simultaneously.

“The rationale for the hive-off is centered around the distinct nature of the businesses. Juspay operates primarily in the B2B payment space, whereas Namma Yatri is a B2C/B2B2C venture addressing population-scale mobility challenges. Its operations are more involved on a day-to-day basis, and the compliance requirements are different. The two businesses are also at different stages of evolution,” Shan added.

On whether JusPay continues to be the largest investor or will they look to sell stake, Juspay believes in the mission of Namma Yatri and the massive problem it aims to solve. Juspay will continue to back the new entity.

Cab services soon in Bengaluru?

Namma Yatri is also planning to launch cab services in Bengaluru.  Namma Yatri aims to empower service providers like drivers to offer superior customer service across various modes of transportation.

The company has already expanded its services to include cab services in Kochi in 2020 and has further extended to Kolkata in July 2023 and Hyderabad in February 2024. As for launching cab services in Bengaluru, Namma Yatri is yet to finalise the plans and will share more details as the plans firm up, said a spokesperson.

“We are still working on the backend and will share more details during the official launch of the service” Shan said.

What’s coming up next?

Asked about whether Namma Yatri onboards other apps/services like MetroMitra and Yaary in the Namma Yatri app, he said: “Yes, we have upgraded to ONDC’s latest spec version and any app compliant with ONDC’s latest version can interoperate with us” said Shan.

Namma Yatri is also looking to tie up with more Metro operators.

“Chennai Metro is now a seller app on the ONDC network, and Namma Yatri is a buyer app on the same network. This partnership allows Namma Yatri users to seamlessly book metro tickets within our app through the ONDC network. Our commitment goes beyond just ticketing; we are actively working to improve first-mile and last-mile connectivity. As more metro operators join the ONDC network, we look forward to collaborating with them to expand our services, reaching a wider audience and positively impacting urban transit across the nation”,

The journey so far

Juspay initiated its mobility app journey in Kochi with Yatri, built on the BECKN protocol, and initially managed by the BECKN team. "We launched a beta version of the app in Bengaluru in November 2022 under the name Namma Yatri and officially launched it in January 2023" said Shan.

Currently, the Namma Yatri family of apps is operational in eight cities across six states in India: Bengaluru, Mysuru, and Tumkuru in Karnataka; Delhi; Chennai in Tamil Nadu; Kochi in Kerala; Kolkata in West Bengal; and Hyderabad in Telangana.

Namma Yatri works with over 2.6 lakh drivers across various cities in India. The family of apps has completed a total of 3.1 crore trips and has helped drivers earn Rs 467 crore, showed data from Namma Yatri’s website.