PE-VC Funds in Electric Vehicle Sector Up 3X This Year
CHENNAI: The Indian electric vehicle (EV) sector has caught the eye of local and global investors. The surge in interest comes on the back of supportive government policies, increasing awareness of the importance of sustainability, and rising petrol prices.
The year 2021 has already recorded 11 investment deals worth $519 million in the sector compared to 13 investments of $165 million value in entire 2020, and 22 deals worth $490 million in 2019, according to data from Venture Intelligence (see graphic).
The deals are across the value chain in electric mobility — from battery makers to energy storage to original equipment manufacturers (OEMs). The investment tally includes renewable energy companies Fourth Partner Energy and Fortum that also operate in the electric mobility space.
Hero Electric raised around $30 million in the first part of its series-B round led by Gulf Islamic Investments (GII) and existing investor Oaks Asset Management to expand production capacity in July. Battery tech startup Log9 Materials raised around $8.5 million from various investors. Euler Motors, the maker of three-wheeler cargo EVs, raised around $7 million from various investors this year. Ola Electric’s $100-million debt from Bank of Baroda this year is the largest debt financing for the sector.
Industry trackers said as EVs gain critical mass, there is more willingness among investors this year to bet on startups in this segment. Conventional automakers warming up to EVs has also improved investor appetite.
Globally, the shift to electric mobility has picked up with growing concerns of climate change. However, unlike the West and China, where personal transportation is going electric, here two-wheelers along with three-wheelers and buses will likely write the India EV story, analysts said. Neeraj Mohan, head of EY-Parthenon India (EY’s strategic consulting arm), said that technological breakthroughs have brought down the cost of EVs to within reach of the mass market, and improved consumer sentiment.
“India today probably is where Silicon Valley was five years ago in terms of investment opportunities and is catching up fast. As a result, the interest among global investors is high and this is just the beginning,” he said.
As early movers such as Ather Energy, Magenta Power, Ampere and Okinawa report an uptick in sales, and with the buzz generated by Ola Electric’s vehicles, more private investment is expected to flow into the sector. Maharashtra, Tamil Nadu, Karnataka and Gujarat are a few states that rolled out incentives to encourage adoption of EVs. India’s electric vehicle sales are set to grow at 26% in FY21-23, Fitch Solutions said in a recent note.
Nakul Kukar, co-founder and CEO of fleet-electrification solutions provider Cell Propulsion (which raised $2 million this year), said global VCs and corporate venture arms have been relatively more active in the segment. Cell Propulsion is currently gearing up for its series-A fundraise and has received lots of inbound interest from major VC funds, he added.
EV experience platform BLive, which promotes EV tourism and has a multi-brand online EV store, said it has a customer base in over 50 cities and is soon launching offline stores. “We plan to raise our series-A early next year, by when we shall have over 20 offline stores up and running. We are already in discussions with investors who put in funds consistently in the category,” BLive co-founder & CEO Samarth Kholkar said.
Source: TNN
