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Reading: Private Equity in India’s EV industry might top $1 billion in 2022
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EV-a2z > News > Private Equity in India’s EV industry might top $1 billion in 2022
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Private Equity in India’s EV industry might top $1 billion in 2022

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Last updated: 2022/11/02 at 8:19 PM
EV-a2zm Published November 1, 2022 5 Min Read
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India‘s electric vehicle demand has significantly increased due to new regulatory measures and the escalating costs of fossil fuels. That said, experts predict that PE investment in India’s electric vehicle sector might exceed $1 billion this year, as per Economic Times.

Contents
Investors had 26 deals worth $906 millionIndian companies that received fundingGovernment initiatives impact India’s EV sectorFear of missing out 

Private equity investment in India's electric vehicle (EV) industry could top a billion dollars this year, say experts, as investors see new policy initiatives and rising cost of fossil fuel accelerating the adoption of green mobility.

Read more: https://t.co/i4mePYjPJ8 pic.twitter.com/MJUF5hphua

— siliconindia – India Edition (@SINewsUpdates) October 31, 2022

Investors had 26 deals worth $906 million

Based on Venture Intelligence’s data, investors committed $906 million across 26 deals in the nine months leading up to the end of September. These include battery production, battery swapping, and charging stations. On the other hand, 31 deals totaling $1.8 billion in investment were in 2021.

National Investment and Infrastructure Fund (NIIF) executive director and CIO Padmanabh Sinha told ET:

“We believe that EVs are at an inflexion point across multiple vehicle categories–the total cost of ownership is already favourable for two-wheelers and is near par for three-wheelers.” 

By 2030, the Narendra Modi-led government aims for electric vehicles to account for 30% of private automobiles, 70% of commercial vehicles, and 80% of two- and three-wheelers. 

Indian companies that received funding

Manufacturer of electric vehicle components, Vecmocon secured $5.2 million this month from backers, including Blume Ventures and Tiger Global. 

https://twitter.com/HaitouGlobal/status/1582929385920741376

Likewise, individual driver financing platform Revfin completed a $10 million Series A funding anchored by Green Frontier Capital (GFC). It is India’s first venture capital fund to concentrate on investments connected to climate change.

RevFin has raised $10 Mn in financing series from Green Frontier Capital (GFC) and LC Nueva Investment Partners, among others. Next plan of action is to focus on geographical expansion and financing 10% of EV purchases in the next five years.
Read more https://t.co/10FoYocnfO pic.twitter.com/xyHpUZCTCG

— RevFin (@revfinindia) October 20, 2022

Moreover, Lightspeed led a $13 million Series A funding round for Exponent Energy in August. Notably, it was its first investment in the domestic EV market. The Bengaluru-based company aims to utilize the funds to expand its e-pump network to 100 locations in each city, beginning with Bengaluru.

🚨 Funding 🚨

Exponent Energy – a 5-minutes EV rapid charging startup

Founders – Arun Vinayak & Sanjay Byalal

Amount -$13 mn (Series A)

Investors – Lightspeed, YourNest, 3one4 & AdvantEdge

Utilisation – Scale proprietary charger & battery pack to 100 locations / city pic.twitter.com/WJSEMVgWlF

— Riya Bakshi (@riyatalkstech) August 17, 2022

“As electric vehicle volumes go up, not only is there a need for technology at various levels, but also an opportunity for funds to make investments in this sector,” said Arun Vinayak, co-founder, and CEO of Exponent Energy. “While startups could be a challenge to legacy automakers, we believe that they are crucial to the automotive industry as technology evolves.”

According to Sinha of NIIF, there would be a lot of prospects to invest in companies within the value chain. Ather Energy, a manufacturer of electric two-wheelers, received a $128 million investment from NIIF and Hero MotoCorp in May. The fund will be used to raise Ather’s manufacturing from its current rate of 10,000 units per month to 35,000 units.

Ather Energy Raises $50 Mn In A Funding Round Led By Caladium Investment

The round comes six months after Ather Energy raised $128 Mn Series E funding round from National Investment and Infrastructure Fund (NIIF) Limited, Hero MotoCorp. pic.twitter.com/c0Ybt2QfyX

— Karo Startup (@karo_startup) October 19, 2022

On the other hand, Tata Motors received $1 billion from the international PE firm TPG last year for its line of electric passenger vehicles.

According to Blume Ventures director Arpit Agarwal, the country’s accelerating electric vehicle adoption is encouraging for investors. In fact, five investments have already been placed in the industry by Blume Ventures. Agarwal also claims that because of EVs’ reduced “total cost of ownership,” commercial two- and three-wheelers and other segments are witnessing rapid traction.

Meanwhile, British International Investment made a $250 million (Rs 1,925 crore) investment in Mahindra & Mahindra at a $9.1 billion valuation (up to Rs 70,070 crore).

/NEW DELHI/L(28.6N,77.2E) , July 10 ( Reuters ) – /India/L(22.0N,79.0E) 's Mahindra & Mahindra Mahindra on Thursday raised $ 250 million from British International Investment for the unit and is exploring a partnership with Volkswagen AG While the Volk…https://t.co/lIRhpXN5Uy pic.twitter.com/hp1RGY2dVt

— LSTA-Linfer-en (@LSTA_Linfer_en) July 10, 2022

Government initiatives impact India’s EV sector

Pranav Pai, a founding partner at 3one4 Capital, said, “Capital is now backing innovation in most verticals in the space–from commercial EV OEMS to EV fast charging.”

He further asserted that government initiatives like the Make in India program, the production-linked incentive (PLI) and Faster Adoption of Manufacturing of Electric Vehicles (FAME) could turn India’s EV market into a source of economic growth.

As the technological ecosystem experiences a recession, venture capitalists and private equity investors are making a swarm of investments riding on the electric vehicle drive.

Fear of missing out 

An investment promotion and facilitation agency’s executive claims that the Indian funds are progressively contemplating early-stage Capital for startups due to a “fear of missing out.” The executive also noted that many smaller funds are considering broadening their investment portfolio towards a more eco-friendly sector.

Notably, Blume’s report reveals that the number of electric two-wheeler sales in India is predicted to increase 24 times from its current rate to 17.69 million units by 2030.

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TAGGED: Battery, Charging Infrastructures, Electric Vehicle, EV, India, Vecmocon
EV-a2zm November 2, 2022 November 2, 2022
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