Invygo, a Dubai and Riyadh-based car subscription start-up, has raised $10 million in a new funding round led by Middle East Venture Partners, a Dubai venture capital firm.
Other investors in the round included Al Rajhi Partners, Arab Bank, Amana Capital, Palm Drive Capital, together with existing global investors Signal Peak Ventures and Knollwood Investment Advisory, the company said on Monday.
The latest funding has brought the total capital raised so far by Invygo to $14.6m.
The new proceeds will be used by the company to expand its operations into new markets and further build its core technology.
“Car subscription with Invygo provides customers with unparalleled convenience and financial flexibility … we are excited to welcome world-class investors on board as we strengthen our leadership position in Saudi Arabia and the UAE, along with plans for regional expansion,” said Eslam Hussein, co-founder and chief executive of Invygo.
“We offer investors a financially sustainable model which is fit for the current macroeconomic environment, and builds confidence in our business,” he added.
Founded in 2019, Invygo is present in Saudi Arabia and the UAE — the Arab world’s two biggest economies. The company aims to invest in both markets and create more than 100 jobs in the next 12 to 18 months.
It is an app-based service that allows customers to choose, drive and swap cars at the tap of a button.
The Covid-19 pandemic propelled the company’s business as people avoided public transport amid social distancing requirements and looked for cheaper options to use cars independently.
The global car subscription market is projected to reach more than $12 billion by 2027 at an annual growth rate of 23.1 per cent, up from $3.6bn in 2019, according to research and advisory company Allied Market Research.
In Europe and the US, car subscriptions will contribute between $30bn and $40bn by 2030, accounting for up to 15 per cent of total new vehicle sales, according to Boston Consulting Group.
Invygo customers can subscribe to a car from their smartphone and have it delivered to their doorstep.
The model is flexible, with no down payments required. All customers have access to insurance products as part of a bundled offering that also includes maintenance, servicing and roadside assistance at no additional charge, Invygo said.
The company also offers “our subscribe to own” offering that allows customers to buy the car after using it. At the end of their subscription term, customers can choose to buy the car for an additional amount or return it.
“Around the world, access to mobility has proven economic benefits for entire populations. In our region however, financing challenges have limited the possibilities for car ownership and this is a problem that Invygo is solving,” Ali Almajthoob, executive director at MEVP, said.
“We are excited to back Invygo as they reimagine the traditional car ownership model and create opportunities for consumers and the industry across Mena [Middle East and North Africa],” Mr Almajthoob said.
With Invygo, customers can access thousands of vehicles across a range of brands. This includes mass-market brands like Toyota and Nissan and luxury marques such as Range Rover and BMW.
Invygo, an asset-light company that does not own the cars provided to customers, has partnered with several car distributors and rental companies, including Budget Saudi, Key Car Leasing and Taajeer Group in Saudi Arabia, as well as National Car Rental (Al Tayer), Diamondlease (Al Habtoor), and Paramount in the UAE.
“By combining customer demand and our deep technology expertise, our teams have built a service that is transforming the automotive industry,” said Pulkit Ganjoo, co-founder and director of data science at Invygo.
“[We] are continuously leveraging and enhancing AI-based data modelling tools to accurately forecast demand, pricing and market growth for optimal market fulfilment,” Mr Ganjoo said.