Fukuoka-based Reevo, a company that provides a smartphone-based car rental service called Veecle!-experience (Veecle), announced in February that it had fundraised from Daiwa Corporate Investment and Sagin Capital & Consulting.  While details of the investment have not been disclosed, Reevo’s capital was increased to 93.3 million yen ($768,000) after securing the funds. Some resources say that the funding amount was estimated to be $570,000.
Veecle provides a wide variety of vehicles, ranging from camper vans to imported luxury cars, allowing users to complete the entire process from search to booking confirmation using their smartphones. Reevo has acquired about 3,000 automobiles available for rent in partnership with 80 car rental service providers as of February 2015.
Veecle had been initially delivering vehicles to user’s homes upon their booking via smartphones, but subsequently pivoted its business model. In their current model, they are a fabless company but can provide users with car rental services in Kyushu as well as Tokyo, Kyoto, Osaka, Hiroshima, Shimane, and Ehime, in partnership with other car rental service providers.
Reevo CEO Ryoma Matsuo told The Bridge what is behind the funding:
Japan’s domestic car rental market is valued at 510 billion yen ($4.2 billion). In addition, I believe it will grow because of the change of consumers’ mindset from ownership to usership in the use of vehicles for their daily lives. On the other hand, more than half of all 500,000 vehicles for rent in Japan are dealt by fragmented service providers that are typically small, and their systems are outdated and cause low operational efficiency. Leveraging special-purpose trucks or low-priced autos that these providers have, we can help improve their business and acquire more customers.
The company plans to use the funds to increase the number of available vehicles and expand its coverage area of car rental services. They want to expand the service nationwide in Japan by this summer, aiming to partner with 500 car rental service providers with 10,000 automobiles.
Daiwa Corporate Investment has love and passion for us, especially for our business and relationship with each other. It is said that the ideal relationship between an investor and an entrepreneur is like a marriage, so I asked Daiwa “Would you marry us?” when we decided to receive the funds from them. Regarding Sagin Capital, a key factor in the decision was we wanted to make a solid connection with local businesses in the Kyushu region through the deal.
Car rental service is obviously part of the vibrant “sharing economy” movement. So it may give the younger generation more chances to enjoy leisure activities or holiday trips.
Translated by Sumi Yo via Mother First
Edited by Masaru Ikeda and Kurt Hanson