Meru eyes up to $200-mn funding in 2016

Radio taxi service provider Meru Cabs is planning to raise up to $100 million (Rs 648.4 crore) by the first quarter of 2016. The company is also planning to raise another $50-$100 million in the whole of next year, as it plans to get into tie-ups with smaller cab companies and expand to 30 additional cities in the next 18 months.

"We are always in discussion for raising funds. In the next round of funding, we will raise $50-$100 million by the first quarter of 2016. We believe the sector needs a lot of capital for marketing, recruitment of drivers, for cars; the sector, as a whole, would need $1.5-2 billion in the next two years," says Siddhartha Pahwa, chief executive of Meru Cabs.

THE ROAD AHEAD

• The firm, with a fleet of about 20k taxis, plans to scale this up to 100k by 2020
• The Mumbai-based firm plans to expand significantly to take on taxi aggregators Uber and Ola
• Recently, it signed a pact with eCab which will help the firm get directly in touch with all tourists with eCab app
• This will help Meru Cabs directly get in touch with all tourists with eCab apps on their mobile phones

In March this year, Meru Cabs raised $50 million (Rs 324 crore) from existing investor India Value Fund Advisors. In all, the company has raised around $120 million. Though the names of investors haven't been shared yet, sources say the company is in talks with a new set of investors to raise funding next year.

The Mumbai-based company plans to expand significantly to take on taxi aggregators Uber and Ola. Pahwa said with fresh funding, Meru would look to get into alliances with a number of smaller cab companies across the country. "Next, year we will get into some sort of alliance with regional players who have fleet of 80-100 taxis. Such tie-ups will help in our expansion plans," he said.

The company, which has a fleet of about 20,000 taxis, plans to scale this up to 100,000 by 2020. Established in 2007, Meru is present in 23 cities. "We would add 20-30 cities in the next 18 months or so; these will include more Tier-II and Tier-III towns. We are already present in cities such as Kochi and Lucknow," Pahwa said, adding while the sector was growing 25 per cent a year, Meru was recording growth of about 35 per cent.

Abroad, it is taking the fight to Uber. Recently, it entered into a tie-up with eCab, part of French taxi service provider Taxis G7. Under the partnership, Meru's customers can use eCab's services while travelling to 50 major cities across countries such as France, Belgium, the Netherlands, Ireland and Canada.

Similarly, eCab mobile app users can avail of Meru services while visiting India.

The alliance will help Meru Cabs directly get in touch with all tourists with eCab apps on their mobile phones. Pahwa said the company was adding 200,000 customers every month.

Asked about Meru going the all-app way, Pahwa said the company wasn't considering that as of now. So far, the company has recorded about five million app downloads.

"We believe India is a growing market. Smartphone penetration is there but it is still low. So, going app-only with our services isn't a great idea. We will still have call centres but we are trying to promote greater adoption of apps," Pahwa said.