DUBAI: Car subscription services Invygo has raised SR7.12 million ($1.9 million)in a pre-Series A round funding as it seeks to expand across Saudi Arabia and the UAE.
The latest funding round brings the total raised by the company in the last year to $4.2 million.
Car subscription services such as Invygo are seen as integral to improving the region’s low motorization rate, which is stifled by high down-payments, the cost of ownership, and restricted financing options for many potential drivers.
A car subscription enables drivers to pay a monthly fee for a vehicle, without a down payment.
Invygo, which launched in 2018, was the first car service platform in the region allowing car buyers to purchase a monthly subscription that also included insurance and maintenance costs through an app based service.
The pre-Series A round funding saw the participation of the group’s existing investors, US-based Signal Peak Ventures, Knollwood Investment Advisory, UAE’s JS Group, and Saudi Arabia’s Wealth Well.
Invygo has partnerships with automotive distributors and rental companies in the UAE and Saudi Arabia, giving their customers access to cars from Toyota, Nissan, Ford, Ranger Rover, BMW, and Mercedes-Benz.
Invygo’s chief executive Eslam Hussein said: “Car subscription services are reimagining the mobility sector in the Middle East as consumers desire a flexible automotive experience, zero financial risk and mitigate the impact of depreciation.”
The company added its expansion is also supporting Saudi Arabia’s rapidly growing gig economy.
Gig economy platforms such as Sabbar and Marn are attracting investment at the same time as the government is seeking to provide better protection for those working in the sector and establish minimum standards.
Hussein said: “As 94 percent of Saudi millennials consider gig economy roles, Invygo will create new jobs and income streams for young professionals, while also contributing to the Kingdom’s economic diversification strategy,”
Invygo’s previous investors include 500 Startups, Eq2 Ventures, Class 5 Global, Gulf Islamic Investment and Kairos K50.