A unit of Ford Motor Co. (F) - Get Report is leading a $24 million investment in Indian rental company Zoomcar, highlighting the push by automakers to expand their businesses with new technologies and get their vehicles into more markets.
Zoomcar, of Bangalore, offers vehicle rentals for terms of as little as an hour. The company, founded in 2013 by American Greg Moran, boasts more than one million users and about 2,000 available vehicles spread across seven Indian cities.
Ford Smart Mobility, a unit of the Dearborn, Mich.-based automaker, is listed as the lead in Zoomcar's new funding round, joined by return investors Sequoia Capital LLP, Nokia Growth Partners and Empire Angels. Exact terms of the deal were not disclosed, but Ford will own 11% of Zoomcar post-funding meaning that the company is likely valued at less than $200 million.
Zoomcar previously closed a $11 million round last summer and an $8 million round in 2014, bringing its total raised to date to more than $43 million.
Zoomcar's model is familiar to U.S. investors as it is similar to that of Zipcar Inc., a short-term rental firm acquired by Avis Budget Group (CAR) - Get Report in 2014 for $500 million. Ford was Zoomcar's initial automobile supplier, and the startup says that the company still provides "most" of the vehicles it offers for rent.
"We're thrilled to welcome the Ford team on board for this next phase of growth in the Indian self-drive space," Moran said in a statement. "Ford was our very first OEM partner back in 2013 and this announcement just cements the fact that the two companies share many of the same core values and vision related to urban mobility."
The company said the new capital will be used to fuel growth, including an associate program that allow individuals to purchase vehicles on behalf of Zoomcar, list the car on the platform, and share in the monthly revenue generated by the vehicle. Zoomcar said it hopes to grow its fleet to 25,000 vehicles spread over at least 25 cities by 2018.
Presumably much of that growth will come through the affiliate program, which means Ford is buying into what should be a steady pipeline of new car sales in India.
Ford's John Larsen, director of mobility for the Asia Pacific region, said that the investment is part of a broader push by the company to dabble in next-generation transportation options.
"As Ford expands its business to be both an auto and mobility company, we are pursuing a long-term vision to develop services and solutions that make it easier for consumers to move through cities using multiple modes of transportation," Larsen said in a statement.
But Zoomcar is not without competition, including rival rental firms Carzonrent, which is affiliated with Hertz Global (HTZ) - Get Report , and JustRide, which has received funding from Alphabet Inc. (GOOGL) - Get Report and London-based Redcliffe Capital Ltd. The rental firms also must compete against Uber Technologies Inc., which has announced plans to expand its presence in India after retreating from China.