Luxury-car rental startup HYPE in talks to raise $ 25-30 million
Bangalore: Bengaluru-based luxury car rental startup HYPE Technologies is in talks to raise $ 25 million to $ 30 million in a Series A funding round, from venture capitalists and from automakers, including BMW Group India and Mercedes India, according to a senior company executive.
HYPE is also in talks with private investors and financial management companies, the company’s chief executive, Raghav Belavadi, said in a telephone interview.
Belavadi said HYPE will use the incoming funds to finance the purchase of vehicle assets. The startup’s rental fleet offers high-end luxury vehicles such as BMW, Audi, Mercedes and Maserati. Users book cars for rent directly from HYPE’s website or through its mobile app.
HYPE, which was launched in 2017, operates on an aggregator model, working with dealers and manufacturers.
After the funding, HYPE plans to switch to an ownership model, according to Belavadi.
The startup provides services in seven cities, including New Delhi, Mumbai, Bengaluru, Hyderabad, Chandigarh, Chennai and Goa. Car rentals on its platform start from ??11,000 per day for a Mercedes, up to ??90,000 a day for supercars like Porsche.
HYPE, which operates 2,600 cars, generated gross revenue of $ 400,000 in fiscal 2018, according to Belavadi. It aims to reach $ 1 million in gross revenue for FY20, he said.
âWe plan to take possession of 100 cars in our own fleet. We are keen to forge a more in-depth partnership with automakers and will seek strategic asset financing or a fleet partnership agreement, âBelavadi said.
The majority of HYPE’s clients are businesses and high net worth individuals (HNI). It also offers a self-drive option and chauffeur service. HYPE is also exploring an option for people to sublet their luxury vehicles directly from the rental platform, he said.
If the funding is successful, HYPE will join one of the many car rental startups looking for more strategic partnerships with automakers to add new vehicle assets.
This month, Ratan Tata increased its stake in Ola and announced its intention to invest in Ola’s upcoming electric vehicle operations. Tata is also an early investor in ANI Technologies, which runs Ola.
In March, Mint announced that Mahindra was in talks to lead a $ 500 million fundraiser in Bengaluru-based Zoomcar.
Bike rental startups, including VOGO and Bounce, also have a partnership with Honda and TVS respectively to supply vehicles to this fleet.
Car rental platforms use their vehicles for a period of 4 to 5 years and sell the asset back to the dealer or manufacturer. Sometimes vehicles are also sold in the used market directly after the end of its time period on a rental platform.
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