Dubai-based start-up Udrive has closed a $5 million funding round led by regional investors and venture capitalists as it seeks to hasten its growth over the next 12 months.
The car-sharing app aims to double its fleet size over the next three months and has set a target of 500 per cent revenue growth over the next 12 months, it said on Tuesday.
Udrive plans to reach 1,000 vehicles by the end of 2021, up from 500 vehicles currently, it said in an emailed response to questions.
As the UAE adopts a hybrid work model and prepares to host an influx of visitors to the Expo 2020 Dubai world fair in October, the company is expecting increased demand for its services – whether for health and safety reasons or cost benefits, according to founder Hasib Khan.
"The ability to avoid large capital costs associated with owning a vehicle while still having the convenience and the ability to enjoy the driving experience is especially attractive to expats, which make up a large portion of the population in the UAE and broader GCC region," Mr Khan said.
"With Expo 2020 around the corner, this mentality and temporary use of assets creates additional opportunities in an already large total addressable market for Udrive."
The pay-per-minute car rental service was in the midst of its series A funding round when the coronavirus pandemic struck, bringing its funding to a standstill, its founder said in February.
When it recommenced, the company secured $2.5m in a Seed+ round last year before raising $1.3m from Eureeca, the Dubai-based equity crowdfunding platform, in January.
Following the closing of its $5m funding round this year, the company’s valuation reached $20m, according to Udrive’s managing director Nicholas Watson.
"With our new strategic investors, we now have unfettered access to invaluable experience in regional market dynamics, FinTech and mobility – a perfect combination for where we are heading," said Mr Watson.
The new investors include Cherif Sleiman, senior vice president of international business at Infoblox, and Asif Keshodia, former chief financial officer of Souq.com, which was later acquired by Amazon.
Udrive plans to use the funds to accelerate its growth across the UAE and enter the Saudi market. The company will also expand across the Mena region and Turkey over the next six months as it looks to capitalise on demand for car-sharing services in these markets.
The company will also invest in improving the data analytics capabilities of its platform, with a focus on customer experience. This includes providing customers with more transparency concerning their trips, a better understanding of pricing models and potentially lower fees, Udrive said.
The UAE is positioning itself as a technology centre in the region, offering incentives for companies to set up base in the country as it seeks to attract foreign investment, draw high-skilled talent, create new jobs and diversify its economy.