SUMMARY
Besides existing investors, the funding round will see participation from new investors – VC firms and family offices, cofounder Ashok Shastry told Inc42
DriveU will utilise the fresh capital to penetrate deeper into major metro cities and enter new cities
The startup, which incurred a net loss of INR 2.2 Cr in FY23, is aiming to close FY24 with a profit of around INR 1.1 Cr
Bengaluru-based on-demand driver aggregator DriveU is in talks to raise a funding of around $10 Mn in its Series B round.
The startup’s cofounder and CEO Ashok Shastry told Inc42 that the funding round, which will also see participation from new investors – venture capital firms and family offices, is expected to close in the next two to three months.
However, he didn’t disclose the name of the new investors. Existing investors, including Capria Ventures, Unitus Ventures, and some angel investors from Silicon Valley, will also participate in the funding round.
DriveU will utilise the fresh capital to penetrate deeper into major metro cities and enter new cities. It also aims to extend its supplementary services like doorstep car wash and maintenance to the new cities.
Recently, the startup also launched new services like allowing users to rent drivers on a weekly basis, car servicing, insurance, and FASTag recharge.
Shastry said that the startup is also piloting an on-demand valet service for its B2B and B2C customers.
Founded in 2015 by Ashok and Ramprasad Shastry, DriveU is a one-stop platform that enables users to hire drivers online on an hourly basis in a hassle-free manner. The startup also offers other services to simplify car ownership for Indian customers. It has raised over $8 Mn in funding till date.
It offers both B2B and B2C services and claims to have over 88K drivers on its platform
Around 80% of its B2C business comes from three major south Indian cities – Hyderabad, Bengaluru, and Chennai.
Shastry said DriveU is also witnessing rapid growth in other cities and this is reflected in its financials.
He said the startup is looking to close the ongoing financial year, i.e. FY24, with a profit after tax of around INR 1.1 Cr despite an increase in marketing expenses and employee headcount. The startup incurred a net loss of INR 2.2 Cr in FY23.
“As we conclude FY24, our yearly revenue stands at approximately INR 91 Cr, a substantial increase of 50% compared to the previous year,” Shastry added.
The startup is raising fresh capital at a time when Delhi NCR-based used car marketplace Cars24 is also venturing into on-demand driver hiring. Earlier this week, Inc42 exclusively reported about Cars24 piloting its new offering in Gurugram.
Commenting on the competition, Shastry said, “…we anticipate that their entry would boost more awareness about on-demand driver services along with further validating this massive market opportunity in which we’ve been operating for nearly nine years.”
