India (Chennai) -founded but currently Singapore-based public transportation technology startup AxleRate Pte Ltd is looking to expand its footprint around the region, to markets like Indonesia, the Philippines, Malaysia and Vietnam.
The startup is raising a S$7 million ($5 million) Series A funding from Mercatus Capital, which it said will go into rolling out its service to more customers and markets. It will also continue to solidify its footing in India and Singapore where it already is.
The startup offers a comprehensive techno-commercial solution that enables taxis or transport operators to enhance passenger experience and improve operational efficiencies, which will lead to increased revenue and profitability for the operators.
Its products, a 7-inch tablet installed in taxis, includes five functions – as a meter, a GPS route planner, voice-activated camera-ready passenger security device (a panic button), an entertainment device with hyper-local content and as the back-end system providing two-way communication function between the operator and the passenger’s mobile.
Founder and chief executive officer Varad Kumaravelu said, with Singapore as its anchor point for strategising and organising think tanks, AxleRate is going ahead with its regional expansion plans.
“We have taken the time to understand each segment of the public transportation, like taxi and bus operators. Our R&D is completed, and now we are moving to accelerate the deployment with customers,” he told DEALSTREETASIA.
AxleRate has spent two years running its proof of concept and refining it for massive rollout. Its current customers, acquired through soft launches in India and Singapore, are already starting to pay a revenue.
Mercatus Capital investment director Aravind Vasu said that AxleRate’s angel round investments had been utilised to drive the company’s research and implementing its service with existing customers.
“The next round of capital is to fund the next level of the business,” he said of the recently raised Series A. AxleRate had previously raised an angel round of $710,000.
A new disruption
From the operator system’s perspective, AxleRate’s offering will help them manage their fleet and drivers better while its system connects with customers in ways that are familiar to them already.
Unlike Uber and GrabTaxi, AxleRate’s business is not to win individual drivers or passengers, but to work with licensed taxi and bus operators. It’s business model focuses on enhancing the experience of taking taxis or buses without getting tangled in the regulation of each country’s transportation system.
Kumaravelu noted that there is a desperate fight for survival among incumbent licensed transport operators who are faced with the new generation ride-hailing technologies.
“In our assessment, there has been a complex change in technologies and customer behaviour that makes it very difficult for an incumbent operator to cope,” Kumaravelu pointed out.
“It is a market that has attracted attention recently as illustrated by taxi comparison app Karhoo in the US who have raised $250 million without revenue,” he told DEALSTREETASIA.
AxleRate’s early adopters include Wing Travels/ Citibank employee transportation, Dot Cabs and Noori in Hyderabad, and SMART bus in Singapore.
He commented that with more than 4.5 million kilometres of testing and operations being logged, the company is now ready to scale.
“Our service takes away the massive pain point and huge costs associated with managing multiple complex technologies for the incumbent operators, at a substantial cost benefit,” Kumaravelu said.
Vasu added that AxleRate’s security panic button on its system is a patent-pending feature. “It is voice-activated, and upon activation, sends an alert to the operator headquarters. The camera immediately takes photos of what is going on in the taxi and records the audio as well,” he explained.
AxleRate has been selected for the Red Herring Top 100 award, identified as one of the most promising technology companies globally.