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Dockless bike firm Vogo set for a spin with Ola, Kalaari Funds

Investors are looking at new bylanes for growth as they scout for a new Unicorn ride in Startupland.

, ET Bureau|
Updated: Dec 19, 2018, 12.21 PM IST
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Vogo
Startups including Vogo and Bounce are creating a market of dockless scooters enabled by technology to cater to India — the world’s largest two-wheeler market, and investors are quick to back them up.
NEW DELHI: After the first phase of capital rush to taxi-hailing apps, venture investors are now betting on the dockless scooter business over the past year as the next billion-dollar affordable transportation business.

Startups including Vogo and Bounce are creating a market of dockless scooters enabled by technology to cater to India — the world’s largest two-wheeler market, and investors are quick to back them up.

Globally, models are emerging in the scooter and bicycle-sharing space. In China, bicycle sharing companies Ofo and Mobike have generated massive scale in just two years. Earlier this year, Uber partnered with Lime to add scooters to its app and Lyft acquired Motivate, the largest bike-sharing company in the US.

In India, venture capital fund Kalaari Capital is in talks to close a $10-million investment round in scooter-rental startup Vogo, according to multiple people aware of the development.

The talks have materialised at a time when India’s largest ridehailing company Ola said it will finance 1,00,000 scooters for Vogo, worth $100 million, in a bid to help expand the supply of vehicles for the scooter sharing startup, signalling the company’s interest in the two-wheeler market. The investment is part of Ola’s bet to further diversify its offerings, as the growth in the core cab hailing in India slows down. It is already investing significant capital in food delivery unit Foodpanda and also plans to enter pharma delivery space through an acquisition, as ET reported earlier.

Vogo competes with Bounce, earlier known as Metrobikes, which has raised capital from Sequoia Capital and Accel Partners.

vogo graph

Financing a scooter which on average costs about Rs 55,000 is the most capital-intensive part of Vogo’s business. However, up to 90% of that cost can be financed, which will further come down at scale.

Vogo’s app enables users to locate, unlock and pick up its scooters and bikes at one point, and drop it off at a different point, without the need for a docking station.

Building network density is key to Vogo’s business which the company aims to solve by first targeting key hubs including metro stations, office parks and colleges across Bengaluru and Hyderabad.

“While cash infusion from Kalaari will enable the company to absorb operating and technology costs, Ola will help in core asset financing which is the biggest barrier to scale in this business,” said an investor directly aware of the matter.

Vogo and Ola declined to comment when asked about Kalaari’s investment.
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