In a recent round of funding, taxi operator Meru Cab Co. Pvt. Ltd has raised Rs.150 crore ($25 million) from Brand Capital, the investment arm of Bennett, Coleman and Co. Ltd (BCCL). Since, May 2015, Meru has raised Rs 300 crore (USD 50 million) from its existing investor, India Value Fund Advisors (IVFA). The ride hailing company has since expanded to 24 additional cities, launched four unique services, and grown its fleet size to 20,000 vehicles.
According to the sources, Meru is deploying these funds primarily to increase brand salience and brand awareness with the aim of widening its customer base. Apart from that, the company is looking to raise an additional $75 million as part of its $100 million fund-raising plan that it introduced last year.
Siddhartha Pahwa, chief executive officer, Meru Cabs, said:
Sixty-seventy per cent of the money will be used for advertising and providing user incentives which would include discounts, loyalty schemes and providing quality service. Meru will use the funds to further strengthen foothold in the Indian market with a focus on providing quality service based on a sustainable business model. We are looking to have 15-17% of the total market share that will make us a $1 billion company by 2022.
With the ongoing competition between other companies in this segment such as Ola and Uber, Meru has upped the ante with new services and along with this round of funding, it would soon expand in other cities as well. The company currently operates in 23 cities and has an operational fleet of 20,000 taxis, 5,000 of which are company-owned.
Shrenik M. Khasgiwala, director, Brand Capital, said:
Meru’s profitable and growing business, strong technology and analytics driven platform complemented by an experienced management team were strong and attractive determinants to partner with the company in this high-growth, consumer-facing industry. This partnership will help accelerate the process of creating the requisite brand positioning as well as awareness for customers who are present across mediums/platforms like Print, OOH, digital, social media, etc.
Meru receives over 70 per cent of its booking from the mobile app. Integrating its booking system with Facebooks Messenger Bot, Meru now has access to a national platform to connect with millions of customers.