Mumbai: Scooter rental startup Vogo is in talks to raise $40 million in an equity funding round led by Lightstone Aspada, along with Korean investor Mirae Asset Management, three people directly aware of the matter said, requesting anonymity.

This follows an aborted bid by Ola-backed Vogo to raise funds from Goldman Sachs. The startup had about two months ago signed an exclusive term sheet wherein Goldman Sachs was to lead a $50 million round in the company, valuing it at about $200 million. However, an internal restructuring of Goldman Sachs’ private equity and investment team led to the New York-based firm withdraw its offer a few weeks ago.

“Goldman invests in private firms from its balance sheet, as well two other arms—Goldman Sachs Asset Management and Goldman Sachs Investment Partners. They are consolidating the investment team to a single team globally and will look for more strategic bets. Because of this, the Vogo deal did not happen," said a person involved in negotiations and one of the three people cited above.

The Economic Times reported on 10 September that Goldman Sachs will lead a $50 million round in Vogo.

With the closure of the potential deal with Goldman Sachs, Vogo is closing a slightly smaller round of $40 million, with Aspada set to invest $10-15 million. Aspada is owned by Swiss investor LGT, which has more than $200 billion in assets. Mirae, also an investor in Ola, will invest about $4 million, while existing investors venture capital firm Stellaris Venture Partners, Matrix Partners and Kalaari Capital will spend the remainder.

Vogo also has a credit line from ride-hailing startup Ola, which allows it to use debt to buy scooters. This allows Vogo to seek lesser equity funding than rival Bounce, which is backed by Sequoia Capital and Accel Partners. It has also raised debt from Alteria Capital.

Vogo and Goldman Sachs declined to comment, while Aspada and Mirae did not respond to emails seeking comment.

Two-wheeler rentals have emerged in the last two years as startups look to solve last-mile connectivity at a lower cost in urban cities as well as smaller cities and towns.

Investors are also encouraged by the fact that startups such as Vogo and Bounce are clocking nearly 100,000 rides a day only a year into full operations—a figure that Ola and Uber took years to reach.

However, making money on small trips and being sustainable without large amounts of venture funding, and vehicle maintenance and thefts, remain an issue.

“The business opportunity for mobility is clear. But the strategy of Bounce and Vogo implies that they will keep raising capital to grow, which may not always be available, given changing investor sentiments," said an investor in the space, requesting anonymity.

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