Jugnoo, India’s leading on demand auto rickshaw aggregator, has raised $5.5 million in Series-B round of funding led by Paytm with participation from Snow Leopard. Started by Samar Singla in November 2014, Jugnoo has so far raised about $9 million. The company is one of the pioneers to enter the auto aggregation model.
It ties up with rickshaw drivers as logistics partners to offer three different services such as Jugnoo Autos on Demand.
Since its launch in November 2014, Jugnoo has extended its services in 22 cities with 2 million users and 30,000 transactions per day.
With a 40-member team consisting of IITians and IIMs, Jugnoo has so far aggregated over 5,000 autos.
It claims that an auto driver is doing 20 rides on its platform at present against six rides a day early this year. The funds will enable Jugnoo to expand pan-India, launch new offices, improving supply quality, incentives and rewards targeted towards driver welfare and performance improvement, scaling up marketing and advertising campaigns.
It compet es with OlaCabs and AutonCab in the auto segment.
Samar Singla, Co-founder and CEO, Jugnoo, commented “We see great prospects lined up for Jugnoo with this funding. Our growth is improving with each new city expansion. We will invest this funding to increase our presence to 25 more cities over the coming six months and provide access to the remotest corners of the country.”
Of late, the auto hailing segment has been witnessing lot of action, global taxi hailing app Uber that launched the auto service seven months ago shut its service this month, thus, raising questions on the viability of the auto aggregation model.
However, Samar Singla, in an earlier interaction had said, “It’s a victory for us that a global player couldn’t succeed in the game that we have been leading for months now.
“It also validates the fact that the company (Uber) was unable to understand the regulated auto market.
“They are good at taxi business and auto is a very local business and is unique to India.”
Singla is very optimistic about the auto market, which is pegged at $12 billion with about 30 million vehicles and is growing at 10 per cent annually.
Compared to this, the taxi market is at $6 billion with a mere two million cabs.
Auto is a very low ticket size but volume-driven market, Singla said, adding that an average ride would cost ₹60-70 compared to ₹150 for a taxi ride, and at the same time, it is a high margin business as autos in most of the metros run on CNG compared to taxis that still run on petrol or diesel.
Jugnoo’s founder said it has understood the problems and challenges that exist in this segment.
His company is planning to double its presence in about 40 cities by mid next year.
The plan is to tap the large middle-class section who would prefer auto over cab as they are cheaper, he said.