When we have 500 cars in our fleet, we will be profitable.
JustRide will use the funds to grow its car sharing service JustConnect. It’s looking to grow its fleet from the current 300 to 2,000 by adding about 300 cars per month. Arch-rival Zoomcar already has over 2,000 cars in its fleet.
“By our projection, when we have 500 cars in our fleet, we will be profitable and will clock an annualized [gross margin in value terms] of $5 million,” said Abhishek Mahajan, JustRide’s CFO. Currently, the company claims it’s at US$3.5 million.
Part of the funding will also be directed towards Yabber, its smart device for cars that analyzes the driving skills of the user. By processing the incoming data, the system rates customers on a scale of 1 to 5, with 5 being excellent. Say you score 5 on the scale, you will get discounts on subsequent rentals. A poor or bad driver may even be rejected next time. This app also helps you connect with fellow drivers in the city and compare scores.
The company is excited about Yabber and plans to raise a larger sum of $7 million for it from its current roster of investors.
Turning a corner
Founded by entrepreneurs from NIT-Allahabad and IIT-Powai, JustRide leases cars from individual owners and delivers them to users within a fixed time frame.
It’s a bit like Uber – but you don’t need to drive people around.
The 18-month-old company made a radical shift in its business in March. It had started by tapping fleet operators offering their cars for rent on its platform. The company now leases vehicles from individual car owners by providing them a minimum guarantee value. Unlike its rivals, JustRide is not the proprietor of the vehicles it rents.
“We are quite hopeful that we are on the right growth path considering the car rental market is poised to grow and touch US$12 billion by 2019. We have added 220 cars since piloting the concept in March,” said CEO Ashwarya Pratap Singh.
With its new model, people like you and me can offer our car for rent and earn anywhere between US$90 and $180 a month. It’s a bit like Uber – but you don’t need to drive people around.
The shift in strategy came under the mentorship of Google and startup incubator Y Combinator. These companies also chipped in with funding. In its earlier guise, the company was to focus on expanding its operations beyond the four cities – Mumbai, Pune, Delhi and Bangalore – it started with. That plan has now been deferred in the view of its new direction.
Investors include Susa Ventures, Kima Ventures, and Axan Ventures. Other participants in the funding round included London-based SCM Holdings, Japan’s IT-Farm, Gmail creator Paul Buchheit, and Y Combinator partners Justin Kan and Qasar Younis (COO of Y Combinator).