Rental Car Market Platform Zoomcar Aims To Raise $9.15 Mn From Institutional Investors Via Share Deal

Neha KamathNovember 7, 2024

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Three points you will get to know in this article:

Zoomcar to use the new revenues to pay off almost $3.6 million in outstanding debt, as well as for general operations.
The deal will see the company issue 21.37 lakh units at $4.28 (approximately INR 360.65) each.
The Series A and Series B warrants can be converted if the company receives shareholder approval.

Zoomcar Sets Eyes On $9.15 Mn Fund Raise Via Shares Placement

Zoomcar, a Nasdaq-listed car rental marketplace, seeks to raise $9.15 million through a private offering of shares to specified institutional investors.

In a statement, the business stated that the new funds will be used to repay about $3.6 million (INR 30.33 crore) in existing debt to select institutional creditors, as well as for general corporate objectives and working capital requirements.

The company also stated that the $9.15 million cash profits will include fees paid to the placement agent as well as other related expenses.

Zoomcar, founded in 2013 by David Back and Greg Moran, is a one-stop rental platform for self-driving cars. It connects car owners with guests, who can rent a variety of cars at reasonable rates.

How Will Zoomcar’s Shares Change Hands?

The deal would see the company issue 21.37 lakh units at $4.28 (about INR 360.65) each. Each of these units will include a common share (or a pre-funded warrant), two Series A warrants (which can be converted into two shares at $4.03 each), and one Series B warrant, with an exercise price of $0.0001 for purchasing shares to be determined on the reset date.

According to Zoomcar, the Series A and Series B warrants can be converted if the company receives shareholder approval. The Series A warrants will be valid for five years, while the Series B warrants will be valid until they are “exercised in full”.

Zoomcar’s Shares History, Profits, Revenue

Zoomcar began trading on the Nasdaq in December of last year, following a SPAC merger with Cayman Islands-based Innovative International Acquisition Corp.

Since then, the corporation has been navigating turbulent waters. Moran, the company’s creator, was fired as CEO in June of this year, ending his 12-year stint. Zoomcar’s global president, Adarsh Menon, resigned a month later after only six months on the job.

On the financial front, the company reduced its net loss by 92% to $2.53 million in the first quarter (Q1) of fiscal year 2024-25 (FY25) from $28.78 million in the previous year due to a dramatic reduction in financing costs.

Meanwhile, revenue from services fell 15% to $2.20 million in the quarter under review, from $2.61 million in Q1 FY24.