ZipGo raises Rs 300 cr funding led by Essel Group, will transition to electric fleet

ZipGo, an app-based provider of intra-city and inter-city bus services in India, will use funds to move to a fleet of 100 percent electric buses, add e-rickshaws, and expand operations.

Bengaluru-based online bus aggregator platform ZipGo has raised funding of Rs 300 crore led by Essel Green Mobility Ltd (EGM). With this round of funding, the team intends to venture into integrated transportation options of electric buses and e-rickshaws. 

EGM has invested Rs 200 crore in the current bus business to expand the fleet and route network, and to transition to a 100 percent electric fleet. The group will invest an additional Rs 100 crore to launch e-rickshaws, a new category. The rollout will happen across different states in the next 12 months. 

EGM is a subsidiary of Essel Infraprojects Ltd, the infrastructure arm of the Essel Group. Essel Infra already has a diversified portfolio of infrastructure projects across 10 business verticals, comprising an order-book value of more than $5 billion, and a national footprint across 17 states and over 100 cities. 

Green foray

This investment is in line with EIL’s foray into electric vehicle segment this year. EGM is the holding company for the electric vehicles and green mobility initiatives of EIL. Speaking of this investment, Ashok Agarwal, CEO, New Initiatives, Essel Infraprojects Limited, said: “We have invested Rs 200 crore in ZipGo’s current intra-city and inter-city bus business to expand the fleet and route network and to transition to a 100 percent electric bus fleet. We will invest an additional Rs 100 crore over the next 12 months to launch electric rickshaws across multiple states on the ZipGo platform.” 

Founded in 2015 by Jitendra Sharma, Gaurav Agarwal, and Pritesh Gupta, the team had begun with a funding of $3 million led by Orios Ventures and angel investors like Nikhil Nanda, MD, Escorts Group; Rajan Anandan, Head of Southeast Asia, Google; Affan Butt, Managing Partner, Code Advisors; and Steven Laurie, Founder of US-based fund Team Builder Ventures to name a few. It began operations in Bengaluru the same year. 

It currently provides intracity and intercity bus services, for individuals and corporates, from its regional hubs in Delhi, Bengaluru, Mumbai and Hyderabad. In December 2016, ZipGo had raised $6 million in Series A investment, co-led by Ventureast and Omidyar Network.

Gaurav Agarwal, Co-founder and CTO, ZipGo, said they have been focused on building a scalable technology infrastructure. Gaurav said they will also add e-rickshaws to the ZipGo platforms.

Ashok said the Essel Group has committed to helping deliver the Prime Minister’s vision of green mobility by 2030. In February, 2018, Essel Infra announced their entry into the electric mobility space with an investment commitment of Rs 4,250 crore. 

Accelerating growth

“Last week we started setting up electric charging stations and battery swapping terminals across 20 cities of Uttar Pradesh at an investment of Rs 1,750 crore. The investment in ZipGo is a continuation of our commitment to further accelerate the adoption of EV technology in India,” Ashok said. 

He says this investment is to help accelerate the growth of ZipGo and the adoption of electric buses in India.

A couple of weeks back, Delhi-NCR based bus aggregator Shuttl grabbed $11million funding led by Amazon. The Shuttl platform offers over 45,000 rides a day, with over 800 buses and 150 routes in seven cities across the country.

“Getting into electric vehicles is economically more viable. Not only does it increase the energy efficiency by 30 to 40 percent, the total costs are lesser than 20 to 30 percent when compared with diesel or gas vehicles,” Jitendra said. 

He said urban mass transport is a huge infrastructure gap in India, adding that Essel Group had vast experience in building and operating multibillion-dollar, world-class infrastructure across the country. 

“This investment, with the support of Essel Group, will now allow ZipGo to accelerate its growth, with a clear focus on green mobility, and successfully navigate the operational challenges of building a pan-India mass-transportation business,” he said. 

Many organisations are looking at electric vehicle transport as the way forward. In April this year, Ola announced Mission: Electric, committing to put over one million electric vehicles on the road by 2021. It committed to place over 10,000 e-rickshaws and electric auto-rickshaws on the road in the next 12 months. 

“This round provides abundant resources and operational expertise to accelerate growth and serve the massive market of 1 billion rides a day. The round is also testament to the technology and the team ZipGo has built, which inspired confidence in Essel Group to come with a strong commitment," said Rehan Yar Khan, Founder and Managing Partner of Orios Ventures.