Chennai-based cab aggregator Utoo Rides’ promoter C Sivasankaran said on Monday that investor Ajay Piramal has bought a ‘marginal’ stake in the company. Utoo, which was launched just over a month ago to compete against Ola and Uber in Chennai to begin with, has been valued at Rs 1,000 crore. Utoo has so far raised Rs 74 Crore from Sivasankaran’s friends and family. It will open investment talks with venture companies and hedge funds for raising about Rs 2,000 Crore once it achieves the milestone of one-lakh rides a day in eight cities.
Ajay Piramal, who is backing a pureplay venture fund Montane Ventures, this is his first investment in a technology-based cab aggregator. Sivasankaran had applied for bankruptcy protection in Seychelles in 2014 following a financial claim by Bahraini telecom company Batelco. Earlier this year, the top court in the island nation cancelled the bankruptcy and ordered that the businessman’s assets be unfrozen.
Sivasankaran said the investment has been routed through Piramal Group company Alpex Corporate Services.
Utoo Rides is aiming to work on a model that shuns driver incentivisation and surge pricing. The company is still in very nascent stages with just a few hundred cabs across the city, Sivasankaran believes the Utoo model will work in an industry trying hard to keep its driver-partners happy.
Sivasankaran said that:
“Utoo, which is planning to release an affordable line of cabs at `6 per kilometre, …will shun hatchbacks that do not have safety features like airbags…Utoo will only use cars that lend themselves to be used as taxis,”