Zoomcar is pitching itself as an investment opportunity for car hosts who can earn Rs 7 lakh per year with one car depending on model, according to the company.
20 May 2024 | 2231 Views | By Prerna Lidhoo
Self-driving and car-sharing platform Zoomcar said that building a host network will help the company achieve its target of $17-20 million this year. The Bengaluru-based company’s global president Adarsh Menon told Autocar Professional that he’s projecting a revenue growth of 70-100% year-on-year on the back of its growing supply network.
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Self-driving and car-sharing platform Zoomcar said that building a host network will help the company achieve its target of $17-20 million this year. The Bengaluru-based company’s global president Adarsh Menon told Autocar Professional that he’s projecting a revenue growth of 70-100% year-on-year on the back of its growing supply network.
“The task of building the supply side ecosystem keeps me awake at night. It's an aggressive growth that we're projecting and will come primarily from supply increases on the platform. So a lot of our focus is there. We’re also expecting to hit an annualised adjusted EBITDA run rate anywhere between $2-4 million in Q4 of this year," he said.
He added that the company has partnered with platforms such as Cars24, Acko Drive, Spinny, and Droom, to help boost its supply network through special financing deals and offers. The company is also pushing for its car-sharing business to provide an alternate form of investment for new vehicle owners.
According to the company, its platform has over 10 million guests renting vehicles for travel purposes, which translates to an income of Rs 7 lakh per year for a Zoomcar host with one car (depending on model). The company also says that its hosts earned around $4 million in Q3 2023 and that there’s a consistently larger mix of professional hosts to the platform with the intent of leveraging the Zoomcar platform as a micro-entrepreneurship opportunity.
“There is an ongoing cost angle to it. Anything that the person can do to make money on an asset is actually very valuable to them. We present a fantastic financial opportunity for that person or that family to earn from the asset that they have spent on and that is the beauty of the value proposition that we have now for hosts,” he said.
He adds that after the company pivoted to an asset-light model few years back, there’s a fair amount of operational excellence, platform and technology-driven thinking in the company. “There are some very exciting problem statements for us to solve. There’s always something very exciting to do around scaling the business in India and internationally where there is good evidence of product market fit, but clearly a long way to go in terms of building the category, building out the ecosystem,” Adarsh Menon, Global President at Zoomcar said.
The company plans to add over 20,000 new cars to its fleet in India by the end of FY2025, betting on the growing popularity of car sharing in the country. He explained that building out the host ecosystem will be the big enabler on the guest side. “What we are seeing is that India is and will always remain a market that has low car ownership. And of course, you have people who have more than one car as well. The other reality is that people in India are also now quite mobile. And there are many parts of the country where it's sort of genuinely impossible or inconvenient to reach using public transport. That's where the proposition of self-drive comes in,” he adds.
One of the trends that Zoomcar sees is that Indians are comfortable in premiumisation and Tier 2 and 3 are going to be big growth drivers. “While the ownership level there might be low, they are quite upwardly mobile in terms of their aspirations. We’re seeing on our platform an increasing demand for luxury cars actually coming from Tier 2 and Tier 3. They're not happy with just basic sort of hatchbacks. What is required to tap into that is obviously build out the host ecosystem right now,” Menon said.
The platform has a number of multicar hosts who now look at Zoomcar as a potential investment opportunity. “That becomes like a business for them because they've realised that that if they invest money into buying cars, the return they get on that is actually more lucrative. We have little more than 2000 multicar hosts who have realized that this is better than putting money behind conventional investments like property, mutual funds, stock market, etc.,” he said.
For Menon, “competition” actually comes from offline, unorganised mom and pop providers, and not really from other car rental platforms like Revv, Eco Rent a car, MyChoize, etc. “We are 95% of the market and we are pretty much the only organised player. Car rentals will always remain a very large market for from a demand point of view. The bulk of our business will still continue to come from the metros, wjereas the Tier 2, Tier 3 markets might grow faster,’ he said.
The company also said that it’s making steady progress to expand beyond India. Egypt continues to scale bookings, while in Indonesia we remain focused on building the appropriate mix of supply to attract higher volumes of demand to the platform on a consistent basis, it said. “We are right now present in some 40 cities in India and we'll soon be in 50 cities, in addition, we’ll expand in Indonesia and Egypt markets,” he said.