Bangalore-based self-riding bike rental company Ontrack has raised an undisclosed amount of seed investment from Diverse Middle East FZE, a Dubai-based family office, and other angels.
Ontrack will use the funds to grow its business-to-consumer operations and to invest significantly into revamping its technology infrastructure, strengthening the workforce and expanding to more cities, Harshit Sonthalia, co-founder and chief executive of the venture, told VCCircle.
Diverse Middle East FZE invests in technology-focused startups. Its first investment was in a San Fransico-based startup that developed a device for chip-based blood test diagnostics. It has also invested in a Toronto-based artificial intelligence startup. Ontrack is its fourth investment and the first in the mobility sector in India.
Owned and operated by Ontrack Technologies Pvt. Ltd., the startup was founded by Christ University alumni Sonthalia and Vansh Jain in February 2016. It offers users two-wheeler vehicles on a monthly rental basis.
The company, which started out with three bikes, manages a fleet of about 500 bikes today. Ontrack operates on an asset-light model by leasing a majority of its bikes. Nearly 20% of the fleet is on its books.
“Our aim was to provide an alternative for cabs and autos for everyday commute, especially for young folks. If we compare the cost per kilometer, we put someone on wheels at a cost of about Rs 5-6 per kilometer, which can be shared by another person. It really works for college students and working people who are already part of the sharing economy,” Sonthalia said.
On the business-to-business front, it works with several bike rental companies including Wicked Ride, Wheelstreet, RentonGo, Royal Brothers and Bykemania, offering them its fleet on a long-term rental basis.
Currently, the startup’s B2B operations account for nearly 80% of its revenue. It plans to scale its B2C unit aggressively to make it account for at least 50% of its business by the end of this year.
“A majority of our business came from the enterprise side so far because we were bootstrapped. So, we took a safer route of not burning capital on customer acquisition. Now, we are aggressively targeting the B2C segment, because that is the largest opportunity for us in the long term,” he added.
The company has partnered with online food delivery firm Swiggy to provide bikes to its delivery executives who do not own one. The startup has a contract with the delivery executive, and not Swiggy, who rents the bike in his personal capacity. It also has similar partnerships with home rental startup NestAway and managed paying guest accommodation provider Zolostays, where it offers bikes to their tenants. These platforms act as a marketing medium for the company.
Besides, OnTrack is working on an in-house GPS system and is in talks with an original equipment manufacturer to launch a consumer leasing product, Sonthalia said.
Other deals in the bike rental segment
Of late, several two-wheeler rental startups have set up shop, and the segment has witnessed considerable investor interest.
In November 2017, Mumbai-based bike rental platform ONN Bikes raised Rs 4.5 crore ($692,000) in a pre-Series A round led by existing investor Z Nation Lab. The round also saw the participation of JITO Angel Network and Mumbai-based funding and incubation platform Venture Catalysts. It operates an app- and website-based online platform, where users can rent out two-wheelers on a daily, weekly and monthly basis. It counts Uber, Ola and Swiggy as its customers.
In September 2017, online scooter rental startup Vogo had raised an undisclosed amount in a seed round led by AV Thomas Group chairman Ajit Thomas; Thiagarajar Mills executive director Hari Thiagarajan; and business head of nutraceuticals at EID Parry Muthu Murugappa.
Online bike rental platform Wheelstreet.in secured $120,000 (Rs 77 lakh) in seed funding from Silicon Valley-based startup accelerator Y Combinator in the same month. The startup had previously raised $500,000 from Broadbean Capital services, an early-stage seed and pre-Series A venture fund.
In June last year, VCCircle reported that Chennai-based two-wheeler manufacturer TVS Motor Company Ltd had invested Rs 1.5 crore in RentOnGo, an online marketplace for renting bikes, electronics and appliances. TVS Motor picked up a 24% stake in Bengaluru-based firm in return for the investment.