Rental car service Zoomcar to list on NASDAQ via SPAC deal by 2023

Rental car service Zoomcar plans to list on Nasdaq next year, after the merger with a special purpose acquisition company (SPAC), Innovative International Acquisition Corp, according to a statement by the company. The combined entity expects to list in the US market at a valuation of approximately $456 million. The company is expected to be renamed “Zoomcar Holdings Inc,” following the transaction. 

“Transaction consideration, consisting of newly-issued securities of the combined company, will include shares of Combined Company common stock, valued at $10.00 per share, and assumption of outstanding Zoomcar securities; additional earnout shares may be distributed to Zoomcar stockholders after closing, upon achievement of certain trading price-based targets or a change of control of the combined company,” Zoomcar says.   

“The boards of directors of both Zoomcar and Innovative have unanimously approved the proposed business combination, which is expected to be completed in the first half of 2023, subject to, among other things, approval by Innovative’s and Zoomcar’s shareholders, and satisfaction of the conditions stated in the Merger Agreement, including regulatory approvals and other customary closing conditions, including a registration statement to be filed by Innovative being declared effective by the U.S. Securities and Exchange Commission,” it adds. 

Innovative currently contains approximately ₹235 million in its trust account. Following the transaction, the proceeds from the trust account are expected to provide proceeds to Zoomcar at closing to pursue its business strategy and for general working capital purposes. Moreover, following the merger, Zoomcar stockholders are expected to retain a majority of the outstanding shares of the combined company and Zoomcar will designate a majority of proposed directors for the combined company board.

Bengaluru-headquartered Zoomcar was founded in 2013 by Greg Moran and David Back and provides rental services by connecting host vehicle owners with guests who choose from a selection of otherwise idle cars to use for personal, business and travel needs. It is backed by prominent investors such as Mahindra and Mahindra, Sequoia Capital India, Ford Smart, and SternAegis Ventures amongst others. The company has so far raised $332 million in equity and debt funding. 

Moran, who is also the CEO of Zoomcar says, “Zoomcar’s car-sharing marketplace is positioned to cut across emerging markets, and we expect to target future expansion opportunities in markets which include SE Asia, Latin America, MENA, and Sub-Saharan Africa.”

“We see a vast addressable market, totalling approximately $90 billion annually by 2025, due to current average private car ownership levels of less than 10% across, combined with an underutilized vehicle base of nearly 200 million cars in our core markets,” he adds. 

With its presence in India, Indonesia, Vietnam and Egypt, the car rental services firm has as many as three million active users and over 25,000 registered cars.