Electric vehicle (EV) components maker Vecmocon has raised $5.2 million from Tiger Global, Blume Ventures and other angel investors.
This is the fourth EV startup that New York-based investment firm Tiger Global has poured money into and the second this year after investing in battery swapping firm Battery Smart in June.
The deal comes at a time when venture capitalists are increasingly looking at the EV space – which they have largely stayed away from – as the larger tech ecosystem is seeing a downturn, ET reported on August 19.
Tiger Global, which is aiming to close a $6 billion fund, has told its limited partners (sponsors) that it would look to make early-stage bets with India in focus.
The IIT Delhi-incubated startup plans to utilise the latest funds to invest into team building, business expansion, scaling up of operations and further product innovation.
Vecmocon said over 100,000 EVs will be made using its parts by the end of the year.
The company manufactures components that have software embedded in them, making it an internet-enabled EV.
This can constitute up to 30% of an EV’s total cost.
Vecmocon’s products include a motor controller, vehicle intelligence module, battery management system and charger, each of which is critical to an EV.
These components will help vehicle makers reduce the time to launch a product in the market as Vecmocon has built a “plug-and-play” model.
Vecmocon’s parts are already being used in about 5,000 vehicles, the company said.
Through these software-embedded parts, the company is building multiple other platforms for servicing, second-hand EV marketplace, and reuse and recycle business, co-founder and CEO Peeyush Asati told ET.
“The service turnaround time and costs are very high, there is no second-hand market because there is no buyer for a second-hand electric scooter because you could not ascertain the value of the vehicle because there is no way to understand how the vehicle has depreciated,” he said.
EV financing rates are as high as 20% because of a lack of understanding of how the vehicle has depreciated, hampering adoption, he added.
“With that thesis, we started up with the idea that we need to build these core components for electric vehicles, but that core component enables us to get the necessary data points and necessary access to the vehicles to build these platforms,” Asati said.
While the startup focuses on building the software capabilities, the company has outsourced manufacturing of these parts to tier-1 parts makers in the country.
Its clients include Loham and Okinawa, among others.
The company primarily focuses on two and three-wheeler EVs as it believes that the early adoption in India will happen in this space.
Vecmocon was founded in 2016 by Asati, Adarshkumar B and Shivam Wankhede.
“We are impressed with the deep commitment and progress that Peeyush, Adarshkumar and Shivam have made to solve long-term problems in India’s EV industry, and we are excited to partner with them as they build a high-quality global automotive tech company to support the adoption of EVs,” said Connie Lee, partner, Tiger Global.
The Ministry of Heavy Industries is cracking down on EV makers that have not adhered to India’s localisation norms, by conducting audits at their factories, ET reported on October 7.
Asati said the recent regulatory changes have been tailwinds for the company, especially after the government said it would enforce a stringent battery standard, called the AIS156, following multiple fire incidents involving EVs during the summer.