Published on The Captable
By Pranav Balakrishnan
The ongoing funding winter and uncertainty around the government’s Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) subsidy policy has seen some of India’s bigger electric vehicle (EV) players struggle to raise funding.
EV two-wheeler manufacturer Ather Energy, for instance, had to scale back its fundraising ambitions, eventually settling for a $108 million fund infusion from its existing investors. Ola Electric, Ather’s biggest rival, faced similar headwinds, eventually raising a $140 million funding round from existing investors that reportedly didn’t move its valuation needle very much.
But while EV soonicorns and unicorns have required protracted conversations to convince investors to write cheques, it seems investors still have a healthy appetite for smaller players in the EV space.
Word on the street is that Exponent Energy, an EV fast-charging startup, is on the verge of securing a funding round of around Rs 200 crore (~$25 million). A source aware of the matter said that the round will likely see a US-based investment firm join the ranks of Exponent’s backers.
Delhi-based Sheru, too, appears to be closing in on funding. An EV battery tech startup, Sheru’s funding round will see investors both old and new pump around $10 million into the company. Two sources familiar with the matter said that the term sheet is ready and the closing of the deal is a mere formality at this point. Baaz Bikes, which makes EV two-wheelers with swappable batteries, is also eyeing a $10 million funding round, a source aware of the matter says.
The CapTable reached out to all three companies for confirmation. While Exponent co-founder Arun Vinayak and Sheru co-founder Nakul Mehan both declined to comment, Baaz Bikes co-founder Anubhav Sharma did not respond to queries.
Incidentally, all three companies are backed by VC fund AdvantEdge. Kunal Khattar, founder and managing partner of AdventEdge, declined to comment on the rumoured funding rounds but admits that despite the funding winter, investors are willing to put money into Indian EV companies since the sector is maturing.
“While the controversy around FAME subsidies added to uncertainty in the short term, companies went back to the drawing board and came out with lower specked and cheaper variants ,” he said. “This has given investors renewed confidence to continue to invest in the EV ecosystem.” Khattar believes that the inflection point for accelerated growth in the EV industry will be when it finally accounts for 5% of overall vehicle sales in the country- which is just around the corner.
Exponent Energy, for its part, is likely to use the fresh funding to power an expansion into more cities, ramp up production, and explore new vehicle types beyond just three-wheelers. The Bengaluru-based startup is currently the talk of the town thanks to its 15-minute battery charging technology, which not only puts paid to range anxiety but could also significantly lower the price tag of EVs.
Sheru, meanwhile, is all about swapping batteries and storing energy. It recently unveiled a technology that lets EVs give power back to the power grid, contributing to grid stability.
Shailesh Vickram Singh, an investor with Climate Angels, which puts money into early-stage companies that are tackling pollution and climate change and also an investor in Sheru, says that the deep-pocketed investors are finally coming around to the tech, potential, and real-world applications of EVs. In his words, EVs are no longer a sideshow but a full-fledged solution to some serious problems.
Edited by Ranjan Crasta
This article was originally published at: https://the-captable.com/2023/09/exponent-sheru-baaz-bikes-all-set-to-close-funding/