“India is not an option for us (for an IPO) mainly because all of our current investors are from Japan and US, and secondly India’s existing laws don’t allow loss-making companies to sell shares to the general public," Sengupta said over the phone.
IPOs are rare among Indian startups, but are now being considered as an essential exit mode for investors in several tech startups operating in the business-to-business and business-to-consumer segments. Startups such as Ola, Oyo, Freshworks and Urban Ladder are expected to go public in the next 2-3 years.
If Drivezy’s plans go through, it will join a growing number of tech firms such as online travel aggregator MakeMyTrip, and SaaS startup Kaleyra, that have chosen foreign markets such as the NYSE and Nasdaq to go public.
Drivezy offers operates a rental fleet of around 15,000 bikes and 4,000 cars in 11 cities. The startup currently has millions of dollars worth of vehicles on its platform.. It now wants to reduce operational costs such as maintenance, and the cost of real estate to operate vehicle parking lots, which are leased from land owners.
Drivezy has so far raised over $40 million in equity financing from investors such as Das Capital, Y Combinator and White Unicorn Ventures. It had also raised $100 million in an asset financing deal, which is parked in a special purpose entity, Harbourfront Capital, set up in collaboration with AnyPay in November 2018.