Meru Eyes Further Expansion

Who is investing?

The investment arm of Bennett, Coleman and Co Ltd (BCCL), Brand Capital, which holds The Times of India and The Economic Times newspapers, has now invested $25 million in Meru Cabs. There were also reports of Flipkart selling an unrevealed portion of stakes to BCCL earlier.

What are the estimations?

In India, taxi-hailing market is currently at $1.2 billion, and is aiming to reach $15 billion by 2022. Earlier in May 2015, Meru secured $50 Million from India Value Fund Advisors (IVFA). Since then, it has expanded to 24 cities.  Additionally, Meru has introduced four different services and has grown its fleet size to 20,000 vehicles.

About the Company

The Company has reached around 10 % margin profit in five cities and has achieved a break-even stage in 10 cities. The company is the only taxi service among its competitors that has achieved profit-making stage. The company will use the new funds to increase its brand recall value and reach to a wider audience.

The company is in talk with a south-east taxi player that would help Meru to understand some new know –how’s of business, and in return, Meru would provide them with technical know-how and backend engine support. According to sources, the company is breaking even in almost all cities where it is available and is growing at 35 % CAGR. Its revenue for 2016 is expected to be around Rs. 800 crore. Siddhartha Pahwa, chief executive officer, Meru Cabs, stated that numerous cab drivers, who had moved on to join Meru’s competitors, have now returned to Meru. This is significantly helping the cab company with further expansion plans.

Takeaways:-

• The investment arm of Bennett, Coleman and Co Ltd (BCCL), Brand Capital, which holds The Times of India and The Economic Times newspapers, has now invested $25 million in Meru Cabs.
• The Company has reached around 10 % margin profit in five cities and has achieved a breakeven point in 10 cities.
• According to sources, the company is breaking even in almost all cities where it is available and is growing at 35 % CAGR.
• Its revenue for 2016 is expected to be around Rs 800 crore.