Outstation taxi service firm Gozo Cabs raises funding
Outstation taxi service provider Gozo Cabs has raised an undisclosed amount from a bunch of Silicon Valley-based individuals including Prem Jain and Jayan Ramankutty.
Jain is former senior vice-president at network gear maker Cisco Systems Inc. and Ramankutty is founder of Profecta.
The company plans to use the fresh funds primarily for expanding its presence across the country, besides launching new products and strengthening tech infrastructure, it said in a statement.
Gozo enlists vehicles and drivers on the platform to offer outstation travel services. Consumers can book inter-city taxis for one-way trips, round-trips, and pre-planned packaged tours across the country. The platform also serves travel agents, event organisers, hotels and corporates.
The company also has a shared cab service called GozoShare.
Owned and operated by Gozo Technologies Pvt. Ltd., the company was founded in November 2015 by Deepesh Arora and Sanjay Kumar. Arora has studied at University of California and University of Mumbai. Kumar, founder of Epitech Infosystems Pvt. Ltd, studied computer science at IIT-Delhi and postgraduated in the same subject from North Carolina State University.
Kumar said, “Within three years, we have built an enviable network and a strong pan-India presence to emerge as a leader in the outstation taxi travel market. This funding is a significant milestone in allowing us to expand the business, strengthen our development to offer end-to-end travel services and create value in the market.”
Gozo claims to have aggregated over 25,000 cabs on its platform that have served rides in over 1,000 towns and cities across India so far. Recently, Gozo signed a pact with the Uttar Pradesh government for the Kumbh Mela, which concluded yesterday. (Kumbh Mela is a Hindu festival and assembly, held once every 12 years at four locations in India, at which pilgrims bathe in the waters of the Ganges and Jumna Rivers.) Gozo also signed an agreement for SulaFest, which is an annual two-day gourmet world music festival held at Sula Vineyards in Nashik. Started in 2008, this festival offers music, drinks, food, and fashion. Some of the activities the festival-goers can engage in include grape stomping, wine tasting and camping.
Inter-city cab space in India
The funding comes at a time when the space is gripped by negative investor sentiment.
According to experts that VCCircle had earlier spoken to, the inter-city cab space, while undoubtedly offering a huge market, faces challenges such as high costs of customer acquisition and few repeat clients. Also, deep-pocketed players like Ola and Uber operating in the same space pose significant challenges for investors.
In 2016, intra-city ride-hailing app Ola relaunched inter-city service in 2016. Ola used to offer inter-city service in its initial years.
In September last year, Delhi-based Vecto Technologies Pvt. Ltd, which operated inter-city cab aggregator Roder, shut down operations.
An industry observer, who did not wish to be identified, said that it is important for the companies operating in this space to get the demand-supply dynamics right.
He added, “More often than not, companies scale down or shut down in this space because of the mismatch between their tech capabilities and ground operations. More than 90% of this business is more about getting control of the driver (and eventually the pricing) and getting the demand-supply side of things right.”
When aggregators go to third-party vendors to onboard drivers, they cede price margins and lower the standard of human resources, said the observer.
Other funded players in the space
Besides Gozo, the market has a handful of other players.
TechCircle had reported in July last year that Indore-based online outstation taxi marketplace InstaCar was in the process of raising funding worth $20-30 million led by a Singapore-based investment fund, whose name could not be ascertained.
In November 2017, online aggregator for outstation travel AHA Taxis raised an undisclosed amount in a pre-Series A round from ah! Ventures and Lead Angels Network.
In July 2016, inter-city taxi service provider Wiwigo Technologies Pvt. Ltd raised Rs 4 crore ($595,000 million) from Indian Angel Network (IAN) and two persons.
In June 2016, reports had said that Ahmedabad-based OneWay.Cab, a single-way taxi service provider, had also raised $450,000 funding from IAN.
In May 2016, cab aggregation startup TaxiVaxi had raised $500,000 in its second round of angel funding from a clutch of persons.
In July 2016, inter-city cab-rental platform MyTaxiIndia Pvt. Ltd raised $1 million (Rs 6.65 crore then) in a bridge round from existing investor Nihon Kotsu Co., a taxi rental firm in Japan.
In 2014, Intel Capital, the global venture capital investment arm of Intel Corporation, pumped an undisclosed amount in Bengaluru-based Savaari Car Rentals.