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SPAC IPO suited for current market conditions: Zoomcar CEO

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In the current market environment, a public listing through a SPAC (special purpose acquisition company) route is very beneficial because it gives companies more certainty about the capital that they can raise and securing commitments for the capital prior to the close, Zoomcar CEO and co-founder Greg Moran told businessline.

“The SPAC route actually gives a little bit more sort of certainty around that process, and it is also more time-efficient as compared to a traditional IPO. “Furthermore, it gives smaller companies an opportunity to showcase their expected future growth and projections to a broader market and investor base, along with the regulator,” he added. 

The car-sharing marketplace has announced its public listing through a merger with special-purpose acquisition company Innovative International Acquisition Corp. This transaction will value the combined entity of Zoomcar Holdings at $456 million.

Moran also noted that the company’s overall contribution margin has become positive in the past quarter, which means it is making money on each transaction. On the back of this milestone, Zoomcar believes that it has all the building blocks to be a successful, high-growth public company. 

Founded in 2013, Zoomcar currently operates in India, Indonesia, Vietnam, and Egypt. Besides India, Zoomcar only has one operational city in each of the three international markets. 

“We are laser-focused on building out scale, density, and supply in these newer markets and continuing to build that network effect in each of these cities. Particularly in Indonesia, which is the biggest of the newer markets because of its size and scale of footprint in the country, On a relative basis, these three markets will start to form a much higher percent of our overall business in the coming year,” said Moran. 

Currently, 90 per cent of Zoomcar’s business comes from India. The company has processed over 7 million transactions in the country since its inception. According to Moran, the company has seen 6.5x growth over the last four quarters. 

Founded in 2013 and headquartered in Bengaluru, India, Zoomcar employs over 300 people and operates in 50 cities across India, Indonesia, Vietnam, and Egypt. Zoomcar has more than 25,000 cars listed on the platform across India, Southeast Asia, and the MENA region. It allows car owners to share their cars and earn additional passive income. 

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Published on November 21, 2022

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