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World EV Day 2022: Leading VCs Pumping Capital In EV-Focused Startups

Several government measures to boost the manufacturing and adoption of electric vehicles in the country should aid in meeting the aim of 100 per cent electric vehicle adoption by 2030. Given the boom and the potential the sector holds, the investment flow is evident at an all-time high

World EV Day 2022: Leading VCs Pumping Capital In EV-Focused Startups
World EV Day 2022: Leading VCs Pumping Capital In EV-Focused Startups

The Indian automobile industry is the world's fifth largest, and it is anticipated to become the third largest by 2030. According to the India Energy Storage Alliance (IESA), the Indian EV sector would grow at a 36 per cent CAGR. As the population expands and demand for automobiles grows, dependency on conventional energy supplies is not a viable choice.

India aspires to be a major player in the global market for electric vehicles. Several startups in this area have developed products and technologies alongside traditional vehicle manufacturers. Electric car sales in India have increased dramatically in the previous five years, but the sector still has a long way to go before it can compete on a large scale with internal combustion engine (ICE) autos.

The overall fundraising scenario suggests that investors are promoting the entire EV ecosystem and focusing on attractively priced higher value-add areas such as charging solutions along the value chain, where there is often more pricing power.

Furthermore, some entrepreneurial innovators ready to take a risk on new technology and unproven business models appear to be attempting to solidify their position. As a result, the electric mobility industry is transitioning from a scrappy entrepreneurial stage to one of infrastructural investment.

Oorja, led by Vineet Dravid, is Capital A's second investment in the cleantech and electric mobility category, following a $2.5 million investment in Chargeup, the network of battery swapping stations.

Ankit Kedia, Founder and Lead Investor, Capital A, said, "Their growth is perfectly aligned with our thesis considered while investing in them. Through Chargeup, hundreds of drivers are now able to drive EVs more economically and efficiently. In fact, the startup recently recorded more than 90,000 swaps in a month cell propulsion with their power trains is successfully enabling faster EV adoption. The Oorja platform is enabling predictive analysis and battery optimisation at the design stage for EV OEMs, solving the major problems associated with battery failures”

In February this year Anicut Capital, another backer of EV startup, infused $2.5 million in Chargeup.

The EV push in India creates a slew of economic opportunities in three main areas which are mobility, infrastructure and energy. Among these are potential in EV franchising, the EV OEM market, battery infrastructure, solar car charging, and battery swapping technology.

Whiles responding Dhruv Kapoor, Partner, Anicut Capital, about what transformation he foresees in the EV segment, he said, “When it comes to the overall sector, we feel that future innovation would come in the form of disruption in range anxiety, charging time, battery heating, manufacturing cost. Innovative models also solve the pain of ownership cost and that is one of the interesting aspects about them.”

Anicut's Kapoor also shared that the strategy to recognise the right EV startup is to invest in it, he said that relevant experience in cleantech space, manufacturing, supply chain and operations matters a lot. Currently, its key for founders to execute in a manner which could be implemented and scaled with the existing infrastructure.

Anup Jain, Managing Partner, Orios Venture Partner, backed BatterySmart, an electric vehicle battery switching network that offers superior Li-ion batteries for electric two and three-wheelers, with a funding of $7 million. Jain said, “Batterysmart is growing the space of battery swapping for 3-ws and 2-ws quite aggressively addressing the growth in demand coming from these segments. The appeal of the business can be gauged from the fact that they must be the only startup in India that has a waitlist that is 4 times the size of its customer base.”

As the mobility sector contributes to around 18 per cent of the carbon emission from burning fuels, this would drastically reduce since the market is shifting towards EVs. Anjali Bansal, Founder, Avaana Capital invested in TurnO and 91Cycles told us their big plans for the sector. Bansal mentions, “We expect India’s EV sector to play a crucial role in the path to net zero, and are seeing interesting models emerge across manufacturing, battery technology, charging, swapping etc. With this new and exciting set of innovators and entrepreneurs coming forward to build EV solutions in India and build for the world, India’s EV sector is poised to take off."

As individuals explore for other sources to cut their monthly expenses, the Indian EV industry is steadily gaining traction, aided by government initiatives and a surge in crude oil prices. However, a mass transition from internal combustion engine (ICE) vehicles to EVs necessitates the increase of infrastructural facilities such as charging stations as well as vehicles with greater range. Several government measures to boost the manufacturing and adoption of electric vehicles in the country should aid in meeting the aim of 100 per cent electric vehicle adoption by 2030.


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