Online taxi hailing service MyTaxiIndia Pvt. Ltd has raised $500,000 in a pre-Series A funding round from Japanese travel major Nihon Kotsu Travel Service Co., marking the first investment for an overseas taxi company in a home-grown counterpart.
The company had raised $100,000 in a seed round from the Gurgaon-based Green House Ventures in June.
The funds will be deployed to strengthen technology infrastructure and bring more vehicles on the platform.
The company works with both operators and individual drivers for its current inventory of more than 4,000 cars and claims to have a presence in 102 cities.
To begin with, MyTaxiIndia will focus on inter-city travel and package tours than point-to-point drops, a market that has been captured by bigger rivals such as Ola and Uber. Besides, it follows both business-to-business and business-to-consumer models.
“On MyTaxiIndia, you can book taxis for local usage on an hourly basis as well as outstation rides and holidays, which may be a five to seven-day affair,” said Anshuman Mihir, co-founder and CEO at MyTaxiIndia.
“In India, about 113 million people made outstation trips in 2013. Hence, this market is huge. We want to capture this market first before entering the point-to-point segment,” he said.
According to industry estimates, the domestic car rental market is pegged at $9 billion, of which about 4-6% is organised.
“For a long time, taxi and limousine service has been just one of the options of transportation to many customers. We want to win the hearts of more customers by upgrading their taxi journey to a memorable moment, which is more than just a transportation,” said Ichiro Kawanabe, chief executive and president at Nihon Kotsu.
Taxi services led by Ola and Uber are witnessing a spurt in demand as consumer habits are shifting towards convenience, on-demand services and, most importantly, low prices.
Ola, which has raised more than $700 million from Japan’s SoftBank, Russian venture capital firm DST Global, Singapore’s sovereign wealth fund GIC and Falcon Edge Capital among others, is in talks with investors to raise another $500 million, Mint reported on 21 May.
The company had acquired TaxiForSure in March for $200 million to increase its lead in the market.
San Fransisco-headquartered Uber announced last month that the company will invest $1 billion in India within the next six to nine months.
Taxi services led by Ola and Uber are experiencing a boom in demand in a country where transport infrastructure is still creaky, and safe public and private commuting options are few.