Brand Capital, the investment arm of Bennett, Coleman and Co. Ltd (BCCL), has invested $25 million in taxi operator Meru Cab Co. Pvt. Ltd.

The company plans to raise an additional $75 million as part of its $100 million fund-raising plan. In the last round, in March 2015, it raised $50 million from existing investor India Value Fund.

Sixty-seventy per cent of the money will be used for advertising and providing user incentives which would include discounts, loyalty schemes and providing quality service, as per LiveMint report. Also, the firm is looking to have 15-17% of the total market share that will make it a $1 billion company by 2022.

Meru Cabs which was launched in 2007 as an air-conditioned radio cab service, now competes with newer rivals such as Uber and Ola (ANI Technologies Pvt. Ltd) that are backed by deep-pocketed investors. Ola plans to raise $300-400 million and Uber raised a massive $5 billion, with its Indian arm expected to receive a significant part of the money. Uber had pledged to pump $1 billion into India in July last year.

Meru currently operates in 23 cities and has an operational fleet of 20,000 taxis, 5,000 of which are company-owned. And the firm is looking to increase the fleet by 15-20% over the next one year and will own 25% of the inventory. It wants to be present in 45 cities by end of 2018.

India’s organized taxi-hailing market, presently at $1.2 billion, is estimated to reach $15 billion by 2022, presenting an enormous opportunity for growth, According to company estimates. Meru is doing everything to tap into the potential of this large market.

It has launched the carpool and ride-share services last year, along with a cheaper taxi service, Meru Genie.

Meru has about 4.5 million users and are looking to clock Rs.850 crore in revenue in the current financial year. The company also launched a specialized service for differently abled and elderly commuters called Meru Enable, a booking system with Facebook’s Messenger Bot, and a taxi service only for women in Delhi.

Image Source: ShutterStock

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