SoftBank and Amazon in talks to invest in Drivezy

NEW DELHI: SoftBank, the world’s largest technology investor, and consumer technology behemoth Amazon are among multiple investors that have thrown their hats in the ring to potentially lead a $100-million equity financing round in mobility platform Drivezy.

The Bengaluru- and Silicon Valley-based startup, which has emerged as the largest two-wheeler self-drive platform in India, has been in the market to raise a fresh round of funding that will also include an estimated $400 million in asset financing, as it expands its fleet across the country and prepares to enter overseas markets as well.

Amazon’s bet on the company is likely to be based on Drivezy’s meta-search platform, Rayy, making it more of a technology play for the Seattle-based company, according to two sources briefed on the developments.


Rayy is a multi-product platform, focused on the gig economy, that will allow manufacturers, Drivezy as well as individuals to list products on it, ranging from shoes to two-wheelers, allowing users to share or rent the same.

In response to an email query sent by ET, SoftBank said, “We do not comment on speculation.” An Amazon spokesperson said in response to an email from ET that the company does not comment on what it “may or may not do in future”.
Ashwarya Singh, chief executive of Drivezy, also declined to comment. Additionally, a number of prospective financial and strategic investors, primarily based in South and Southeast Asia, have also commenced negotiations, according to the sources.

Talks with SoftBank have included the possibility of the Tokyo-headquartered investor investing through its $100 billion Vision Fund, as well as through the Japanese telecom, media and internet Group’s balance sheet. While there’s no guarantee that a deal will materialise, a potential transaction could be a mix of equity and debt financing.

“A deal is likely to take between 2 and 3 months to close, but there has been a lot of interest, and there is a good build-up…The market is currently extremely bullish on mobility,” one of the sources cited above said on the condition of anonymity.

The potential equity investment will be linked to the asset financing round as well, thereby hedging the investors’ bets. Drivezy is launching its four-wheeler platform in San Francisco, its first overseas market, next month, which could also lead to several US-based investors pitching in to invest in the company.

Drivezy currently has 15,000-strong scooter fleet, present in 11 cities, having launched in the National Capital Region earlier this month, making it, in the process, the largest self-drive two-wheeler player in the country. It also has around 4,000 cars.

The four-year-old company, which has a monthly active user base of about 1 million, has primarily sourced its two-wheeler fleet from Honda and Yamaha, the latter which is also an investor in the company through its investment arm.

Lunched in 2015, Drivezy, which was formerly known as JustRide, has been founded by Singh, Abhishek Mahajan, Hemant Sah, Vasant Verma and Amit Sahu. It is also a summer 2016 Y Combinator alum. The company, which has raised a shade over $35 million in equity financing till date, counts the likes of Das Capital, the investment firm founded by Japanese serial entrepreneur and investor Shinji Kimura, Bain Capital, the multi-asset alternative investment firm cofounded by former US presidential candidate Mitt Romney, European investment firm Accent Equity Partners and IT-Farm Corp among its investors.

Separately, Drivezy has also secured a $100-million asset financing deal, backed by Japan’s AnyPay, which it planned to use to build up its vehicle fleet. Overall, the company has raised an estimated $128 million in asset financing till date.

Bets on new economy mobility platforms have seen the likes of global automakers, such as General Motors, Ford Motor Co, Hyundai and Toyota Motor Corp, backing ride-hailing companies such as Ola, Uber and Lyft as the OEMs continue to hedge against slowing car ownership across the world. US-based e-scooter startups Lime and Bird, which are reportedly valued at $2 billion each, are also believed to be in discussions to raise fresh rounds of capital.