New Delhi: Car and bicycle rental firm Zoomcar has raised $40 million (about Rs 256 crore) in fresh funding, led by Mahindra & Mahindra (M&M) with participation from existing investors.

Of the total amount, M&M is pumping in up to Rs 176 crore in Zoomcar India and Zoomcar Inc, its US incorporated parent company.

"We will use this series C funding primarily for accelerating our marketplace supply growth, and strengthening our technology as well as expanding into additional mobility categories across India," Zoomcar co-founder and CEO Greg Moran said.

He added that the funds would be directed towards bringing more electric vehicles on to its platform.

Zoomcar had raised $21 million in two tranches between October 2014 and July 2015 from Sequoia Capital and Empire Angels. Later, it received $24 million from Ford Smart Mobility LLC.

According to a regulatory filing, the Mahindra group will acquire about 16 per cent stake in Zoomcar Inc through this deal. For 2016-17, Zoomcar India had recorded a revenue of Rs 121 crore, the filing said.

The Mahindras said the company had been keen to invest in the shared mobility space.

"We are confident that this partnership with Zoomcar will help further our vision to transform mobility in the country, thereby creating a more connected ecosystem," M&M managing director Pawan Goenka said.

In November last year, Mahindra and Zoomcar had announced a partnership to introduce electric vehicles (EV) in the shared mobility space.

Zoomcar has recently introduced Mahindra e20Plus EVs across Mysore and Bangalore. "We have EVs in Mysore and Hyderabad and we will extend these to 20 Indian cities in the coming months. We expect to add over 500 Mahindra EVs in the first half of 2018," Moran said.