I met Greg Moran for the first time at a restaurant near my office, when he was raising Zoomcar’s seed round. He came across as a determined individual with really good communication skills, but I was apprehensive.
When I returned to India after an entrepreneurial stint in the US, I felt disillusioned by the wide gap between the two entrepreneurial ecosystems. So, I found it hard to believe that an American entrepreneur would persist in the fast-evolving Indian ecosystem. In addition, to scale an operating expenditure (Opex)-heavy model in India is close to impossible.
Nevertheless, we met again in Bengaluru when Greg was running his operations out of the Chancery Hotel, and Zoom had grown to a 50-plus car operation, which was impressive. But that’s when I noticed an economical flaw. Zoom was sitting on unsold inventory throughout the week, since most of the leasing took place on weekends. While their operational and financial costs remained consistent, they were losing money on four out of seven days in a week. To counter this, they spent tonnes of money to market zoom and acquire customers, which further affected the unit economics.
Secondly, there were legal lacunas regarding the temporary ownership of a vehicle in India. In fact, it wasn’t clear whether the self-driving model was legal yet.
For example, if someone was hit by a Zoomcar driver, was Zoom financially responsible for the accident? Lastly, I doubted Greg’s certainty that his cars wouldn’t meet the same fate as Meru! This is why I let Zoom pass for a second time, even though I really liked Greg. In hindsight, Zoom would have returned approximately 30% IRR (internal rate of return) as an investment, but with my portfolio’s IRR exceeding 60%, it isn’t a decision that I rue.
A section where investors talk about missed opportunities in start-up investments.