Online car rental platform Drivezy has raised $5 million from its first round of initial coin offering (ICO) said CEO Ashwarya Singh. An initial coin offering is an unregulated means of raising money from potential investors by using crypto currencies such as Ethereum, Bitcoin and so forth. An ICO allows the startup companies to circumnavigate around regulatory steps required by venture capital funds, private equity investors and bank regulations. The company had announced their ICO offering last year in October in Japan through a tie-up with Japanese fintech company Anypay, which so happens is an investor of Drivezy.
The Mumbai-based start up limited the current round of ICO to investors who have a net worth of over a $1million or an annual income exceeding $200,000. Existing investors and high net worth individuals from Japan and Singapore participated in the round. Drivezy currently operates on a sharing model which allows car owners to lease their vehicles, which then are rented out to registered customers on the platform. The company claims to have more than 1300 vehicles listed by more than 800 owners. They also claim to have over half a million registered users. With the current round of investments, Drivezy plans to increase their fleet by 800 vehicles and bikes to its platform.
In the ICO, Drivezy's potential investors were allowed to purchase cryptographic tokens which would entitle them a share of revenue generated by rental transactions on the platform. The company sold close to 3 million tokens in the current round. Drivezy offered the ICO on the Ethererum blockchain with its priced pegged at 0.00141 ETH per token or roughly $1.20 at current market price. Each investor is entitled to receive 95 percent share of the monthly revenue earned by vehicles on the rental platform. For the sole purpose of offering ICO, the company has also launched their own crypto currency called RentalCoins which will be used to pay for rides in the future.