Gurgaon based online travel agency and travel search engine, Yatra, has acquired Bangalore based auto-rickshaw aggregator, mGaadi. Acquisition talks have been going on between the companies from mid-May and have been finally concluded when a “a definitive agreement to be acquired by Yatra” was signed.
mGaadi, which was founded in 2012 by founders Soloman JP and Vishy Kuruganti, started looking for a way out after several unsuccessful investors meeting. mGaadi, which initially started its services using “call auto” method soon developed an app and raised its first funding of an undisclosed amount from Unitus Seed Fund, a global impact investment firm. But efforts to secure more funds failed as investor feared the entry of Ola and Uber in the auto-rickshaw segment.
How mGaadi works?
As part of the deal, mGaadi will integrate its services into Yatra’s products and services. mGaadi had designed its platform to make hiring an auto easy for the commuters. It had planned mount the auto rickshaws with GPS via mobile as well as an on-vehicle GPS to enable the commuters to find the autos nearby. According to mGaadi’s own blog, the company had ambitious plans which included opening up business in frontier markets such as Kenya. But lack of financial support proved the death of those plans and company soon had to look for selling the enterprise.
Quoting from mGaadi’s blog
“Doomsday warnings notwithstanding, there were large swaths of the global transportation market seemingly outside the 24-month priority list of Uber, Ola, and GrabTaxi.”
This again proves the point of importance money for a startup. Even though the company dubs this move as “very exciting”, this is certainly a loss of David at the hands of Goliath.