Intra-city shared mobility landscape in India can be broken up into 3 categories based on the average distance of travel: micro (0-3kms), short (3-10kms) and long (10-25kms). Majority of venture capital investment prior to 2018 was made in the long intra-city commute market in companies like Ola, Shuttl, etc. In 2018, funding focus shifted to short commutes and companies like Rapido, Bounce, Vogo raised Series A rounds. Only in the recent past, have investors taken note of the large unsolved pain point in the last mile and first mile segments and venture dollars have followed with investments in e-scooter and e-rickshaw companies - the two form factors with the potential to solve this problem.
ElecTorq is one of our investments targeting the e-scooter segment, but unlike other operators like Yulu and Mobycy (or even e-rickshaw aggregators like Sheru and Oye Rickshaw), ElecTorq is a design and technology developer focused on building India specific solution for micro-mobility. We choose to invest in an intelligent hardware focused player, as we believe there are few unique nuances in the micro-mobility market and the way it will evolve over time.
Firstly, all operators running e-scooters in India currently have launched products exported by Chinese manufacturers in complete knock-down (CKD) form and which are then assembled in India. These products are designed and manufactured by the Chinese for the consumer markets in the US and Europe based on their specific requirements given local conditions and are sub-optimal given the ground realities and infrastructure challenges in India (especially for shared mobility use). The recent fundraise by Yulu where they have brought Bajaj onto their cap table as a strategic investor gives weight to this argument. For the Indian market, we think Elec Torq can build robust, sturdy and intelligent hardware for shared mobility, tackling challenges around fleet management, range, suspension, vandalism, theft, road infra, amongst others.
Secondly, we feel that the hardware itself will be important in determining success in the e-scooter segment (unlike software for ridesharing), as asset is key to customer experience and its payback will determine unit economics. Hence, the focus of Bird and Lime in developing and launching new proprietary, more robust models with longer lifespans (like Bird Zero in 2018, then Bird One in May 2019 and the latest Bird Two in August 2019). We also believe that a local vendor like ElecTorq proving total turnkey solutions (including intelligence around the hardware and cloud tools) not just one time hardware cost will create a competitive advantage over Chinese imports.
Finally, many more e-scooter micro mobility startups will have the opportunity to operate relative to the ridesharing market due to the ease of starting up, higher cost to create density locally, lower CACs, hyperlocal operations and requirement to work with local authorities/governments closely. Hence, unlike ridesharing where only few large players dominate each continent (Uber, Lyft in the US / Ola, Didi, Grab in Asia), there will be more players for longer before eventual consolidation in this space. This provides us the opportunity to scale a “picks and shovels” kind of business catering to everyone who wants to use our India specific intelligent hardware.
The ElecTorq team is very determined, passionate and highly competent technically. We met the team for the first time on a Friday and 72 hours later, they had their first prototype which was demoed to us on Monday. Anubhav, Shubham, Karan and Sahil have been core members of the Axlr8r Formula Racing (AFR) team at IIT Delhi and have developed 3 Formula Electric Cars together, having represented India twice at the World Championship of Formula Student Germany. We are very excited to partner with them and see extensions to different form factors and potential use cases!