As venture capitalists moved on from e-commerce last year, the cab rental industry seems to have caught their fancy. Investors have been courting some serious business opportunity in the largely unorganised $6-billion domestic cab market, growing at 25-30% year on year.
Over the past two years, the cab rental space has seen debuts of players like OlaCabs, TaxiForSure and TaxiGuide amongst others. Bangalore based Cabs24x7 is the newest to enter the space. The company has launched its online car rental marketplace, which enables customers to search and book car over the Internet and phone across 18 cities in India.
The company aggregates various small and medium car rental operators across the country and bring them under one platform and gives them a new distribution channel for their inventory. The portal offers cabs for local usage, airport transfer, outstation booking with premium car section which lists likes of Mercedes and BMW.
For travelers, the startup solves the pain of searching cab operators at any of 18 cities with reasonable charges. “Most of the big car rental companies operating in metros predominantly focus on the corporate car rental market and has little focus on the retail segment of the market,” said Srinivas Rao, one of the founders of Cabs24x7.
For making an online booking, Cabs24*7 takes 3 hours to enable confirmation of the booking, which may not be the best thing to do if you are pressed for time. At present, the company claims to have 2 operators at each of the city with a committed fleet of 10 vehicles for each operator. “The approximate fleet of around 350 cars of various makes and models are currently in our umbrella,” said Rao.
The venture is being bootstrapped by the founders and currently has 10 people working for it. Cabs24x7 intends to expand its services to 8 more cities and to 50 cities by next financial year.
Investments in cab rental space
According to industry watchers, the spurt in investment in the cab rental space is fueled by the sheer opportunity this category offers. According to some estimates, 90% of the cab market in India is unorganised.
In 2012, venture capitalists invested in various cab rental portals like OlaCabs, TaxiForSure, SharedTaxi, Savaari amongst others.
– Car rental service, Savaari secured INR 5 Crores ($1mn) in Series A funding from Inventus capital. Savaari has presence in more than 50 cities across India.
– Mumbai based Olacabs raised Series A funding (more than $ 3 million from Tiger Global). Olacabs started in 2011 (read our detailed interview) and the service is now present in Mumbai, Bangalore and Delhi.
– Shared taxi service, Sharedcab raised angel investment under Rs 5 Crores from prominent investors – Anupam Mittal, Sasha Mirchandani (Kae Capital), Blume Ventures and few others.
– TaxiForSure had raised venture capital funding from Accel Partners, Helion Venture Partners and Blume Ventures. At present, company is offering its services in Bangalore only.
– Call Taxi Service, Bookmycab secures funding from YourNest Angel Fund and Mumbai Angels.