While there’s no defeating Ola and Uber when its comes to ride-hailing business in India, but Bengaluru-based self-drive car and bike rental firm Drivezy might have just outshone these two giants when it comes to Bitcoin adoption.
The startup, which currently has a fleet of over 1300 vehicles in four cities across the country, is planning to come out with an ICO, to raise 17,625 ETH (~$5 mln). Drivezy recently announced the launch of its private Initial Coin Offering (ICO) and has partnered with Japanese payment firm Anypay for the same.
The startup plans on introducing bitcoin as a payment option as it believes by developing initiatives around it will allow for global ownership of its fleet.
“We have started accepting cryptocurrency such as bitcoin for transactions on our platform. We have seen 150-160 transactions through that mode so far,“ said CEO Ashwarya Singh in a statement to Economic Times.
An Indian startup planning an ICO raises a lot of eyebrows, especially considering the fact that virtual currencies operate in the grey area in the country as they are still not legal here. However, unlike regulators in the US or China, Indian regulators have opted to largely remain silent on the issue. This is the reason that Drivezy has decided to launch its ICO in Japan and open it to accredited investors only as it wants to remain cautious if the Indian regulators someday decide to come up with tough regulations against cryptotokens.
One of the biggest apprehensions that merchants have while accepting Bitcoin is its volatile price. In order to manage this risk, Drivezy has tied up with a payment processor called Unocoin. While the app’s users might pay in Bitcoin, Drivezy will be receiving the rupee value of those Bitcoins and thus remains protected from volatility of any kind that might take place. However, if a customer ever wants a refund, the amount they would get could be less/more than the Bitcoins they paid initially, depending on how the price of Bitcoin has moved.
The question that arises here is why a small firm like Drivezy can adopt Bitcoin payment but big firms like Uber and Ola haven’t embraced the technology as of yet. Well, the answer is simple. Being a global ride-hailing superpower, Uber operates in multiple jurisdictions, thus taking this step is much more difficult for them as they have to ensure that they have a comprehensive policy about accepting cryptocurrencies and ensure that regulators from all the countries they operate in are on board.
Last week, Drivezy had raised a whooping Rs 65 crore ($10 million) in a part-equity and part-debt round.
Formerly called JustRide, an equity investment totalling $5 million was made by American and Japanese investors, which included Axan Partners, Das Capital and IT Farm, while a consortium of banks and NBFCs including Mahindra Finance, ICICI Bank, Cholamandalam Finance and Shriram Finance have gone for a $5 million investment in debt in Drivezy.
This development was first reported in CoinTelegraph.
[Image: PanAm Post]