Invigo, which operates in the United Arab Emirates and Saudi Arabia, has raised $10 million in Series A funding led by MEVP as it works to grow its car rental services in the region.
Founded in 2019 by Islam Ahmed Hussain and Pulkit Ganjo, the Middle East startup has raised $14.3 million to date. Al Rajhi Partners, Arab Bank, Amana Capital and Palm Drive Capital and existing backers Signal Peak Ventures and Knollwood Investment Advisory participated in the new round.
Car registration supplies
Invigo offers three types of rental services. Short-term rentals allow individuals to rent a car for one, three, six, or nine months. Long-term leasing allows you to rent a car for 12, 24 or 36 months. And then there’s the self-registration model — new or partially used — that leases cars over a 24- or 36-month lease period with an initial payment that’s lower than the standard down payment, the startup says.
Users looking for a short-term rental can go to the website, view available cars and book a rental. On the platform, the company provides car details such as model number, year of manufacture and the car’s mileage. You can also filter the results by car type, fuel type, transmission type and color.
Invigo offers value-added services such as door-to-door delivery, car replacement, maintenance, standard insurance and a round-the-clock helpline.
At the end of the rental period, in the subscription model, the customer can pay any remaining amount to own the car – when this amount is registered – to purchase the vehicle directly. The founders said that he is working with various financial institutions to offer various options such as loans to pay the last billion amount.
“We paid the full amount of the car in three. Typically, you’ll have a huge down payment of around 20% and monthly payments with no way to get out of that commitment. Our starting fee is around 5% and you have the option to cancel your plan at any time without penalty,” Ganjo said in a call with TechCrunch.
Invigo took a cut from the subscription price, but the company didn’t say how much. It’s not profitable yet, the startup said.
Approximately 200 cars in Saudi Arabia and 100 in the UAE are available for subscription on the platform on a typical day. The startup said it works with partners including local car rental services and dealerships to source the cars.
Growing subscriber service
According to Ahmed Hussain, Envigo’s focus is to grow the subscription program that was launched in Saudi Arabia earlier this year.
“Currently, self-registration represents 10 percent of our total business. We are thinking of growing it to represent 50% of our business over time. “We expect subscriptions to be 70% of our business, especially in Saudi Arabia where people want to own property and have it in their name,” he said.
The most attractive part about the subscription plan is that customers are not obligated to pay a balloon to own the car, the startup said. You can cancel the plan at any time without penalty. What’s more, it’s creating an alternative credit score for people based on driver behavior and payment strategies. The startup is using this score to finance the remaining payments itself or through a network of banks.
Competition and the way forward
There are a few startups in the region that offer competitive monthly rental options. In the year There’s Ecar, which last raised Series B funding in 2019, and Swap, which partnered with Uber-owned Careem to offer flexible car rentals on the Super app. Invigo believes its offering is different as it focuses more on long-term subscriptions and car ownership.
The founders think that their competitors are traditional institutions that offer car financing. “What we’re doing is giving you financing in a more accessible way without making any commitments,” he said.
In the next 12 months, Invygo wants to expand the subscriber base in both markets. If it sees a big opportunity in markets like Qatar, Egypt or Pakistan, it wants to pursue expansion.