Bengaluru-based Routematic raises ₹340 cr, defies electric vehicle dip

Bengaluru-based Routematic, India’s leading artificial intelligence-driven corporate transport-as-a-service player, which provides its services to over 300 companies, on Wednesday announced that it has secured ₹340 crore in a funding round led by Singapore-based Fullerton Carbon Action Fund and French green fund Shift4Good. Ostara Advisors, India’s leading climate-technology investment banking firm, was the exclusive financial advisor to Routematic on this transaction. 

The move is important as it comes at a time when the app-based mobility space — both business-to-business (B2B) and business-to-consumer (B2C) — has been under a cloud, following the financial crisis and closure of BluSmart Mobility Services, which was based primarily on electric vehicles (EVs). 

Founded in 2013, Routematic provides a safe and predictable commute experience to over 300,000 employees, undertaking 5 million trips a month. 

India’s employee transportation market is expected to reach $13.2 billion by 2030. Says Sriram Kannan, founder and chief executive officer of Routematic, “With the new fundraise, we will be expanding to the top five cities in the country, which account for 85 per cent of the corporate transportation business. Currently, we are in Pune and Bengaluru; we will now expand to Hyderabad, Delhi, and Chennai.” 

Currently, 10 per cent of the fleet consists of EVs, but Kannan says demand is much higher. The plan is to increase the share of EVs to 30–35 per cent in a few years and shift to a fully electric fleet by 2028–30, in line with clients’ plans to expand their green footprint. 

Kannan says the focus is on driving efficiency rather than just top-line growth, which has already helped the company achieve profit after tax. 

He says the corporate transportation business has two segments — B2B and B2C. The former is already valued at $4 billion annually in India, and Routematic currently holds only a 5 per cent market share. The goal is to increase this share to 20–25 per cent in three to five years through the fundraise. 

The company also has a presence in the B2C segment through its COCO Rides brand, for which it has allocated 15 per cent of the funds for expansion. “We have already seen large campuses wanting to work with us, and we’ve landed a few large deals. So, COCO Rides is also projected to account for about 15–20 per cent of our total revenue over the next three to four years. COCO Rides is B2C, but you could also call it B2B2C (business-to-business-to-consumer),” he says. This market is estimated to be larger, at $14–16 billion per annum. 

Their strategy is differentiated from Ola’s or Uber’s in the B2C space. COCO Rides services are available only to customers who work in companies with which Routematic has a corporate transportation tie-up. Only these users can access the service through the app and pay directly for their rides. This model also increases the utilisation of Routematic’s vehicle assets. 

The COCO model concentrates on high-volume areas, with partnerships including real estate majors such as Brookfield and information technology hub developers. 

Routematic had earlier raised roughly $6 million across previous investment rounds led by Blume Ventures, VAMM Ventures, and Bosch between 2015 and 2021.