Zoomcar, which was started by American duo Greg Moran and David Back in 2013 in Bengaluru, is now backed by Mahindra & Mahindra. Drivezy, launched as JustRide in August 2015, assumed its current brand in July 2017.
Talks are still exploratory and may not culminate in a deal unless lenders to both companies approve the terms of the deal, said two of the three people cited above, all of whom spoke on the condition of anonymity.
Top investors in both startups are likely to hold stakes in the merged entity, they added.
Financial details of the transaction could not be ascertained. However, one of the three people cited above said, “Zoomcar might look at a share-swap deal, which will allow the company to pay existing shareholders using equity shares, rather than paying the sum entirely in cash."
Questions emailed to Zoomcar remained unanswered till press time.
A Drivezy spokesperson said, “We refrain from commenting on this information".
Mint reported in April that M&M was looking to invest as much as $400 million in Zoomcar. Drivezy is also looking to raise around $400 million and an additional $100 million in debt funding to fuel its expansion across India and a planned US launch.
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