Vidyut Tech, a startup focussed on EV financing and vehicle lifecycle management, has raised $4 million in a mix of equity and debt in a round co-led by Force Ventures, Veda VC, and a clutch of strategic angels in the clean energy space.
Some of the most prominent names in the startup ecosystem participated in the round, including Sujeet Kumar, cofounder of Udaan; Sahil Barua, cofounder of Delhivery; Kunal Shah, cofounder of Cred; Sriharsha Majety, cofounder of Swiggy; and Rajat Verma cofounder of Lohum.
After securing the funding, the startup will partner with more EV makers and expand to more geographies. It will also double the headcount of its credit, engineering, and sales teams.
Founded in 2021, Vidyut Tech primarily caters to commercial vehicle fleet owners by providing them with EV financing and ownership plans that take away the risk of owning a battery.
The company has already partnered with EV makers Mahindra, Altigreen, Euler Motors and OSM to provide what it claims is a one-of-a-kind vehicle ownership solution for commercial vehicle owners.
Commercial vehicle owners can buy vehicles without owning the battery, thereby paying less up front for an EV, even in comparison with diesel-powered vehicles.
The down-payment requirements for EVs are normally 2.5-3 times more than in the case of diesel vehicles, the company claims. The ownership of the battery and the associated liabilities will lie with Vidyut Tech.
Proprietary underwriting model
Vidyut Tech has exclusive access to vehicle and battery testing data from EV makers through which it has been able to build its proprietary underwriting model.
The startup has been able to solve for the uncertainty around battery life and the high replacement cost of batteries. The battery cost accounts for 40-50% of the vehicle value, which makes commercial vehicle owners hesitant to buy batteries.
After three to five years of usage in an EV, a battery degrades and it usually goes straight to recycling, where different elements, such as lithium, nickel and magnesium, are extracted separately for reuse.
Vidyut Tech claims that it will be able to get a residual value by selling old batteries for different use cases such as energy storage, and will provide a new battery to vehicle owners free of cost. It has partnered with NBFCs and provides an effective interest rate as low as 7% to customers.
“The biggest consumer need to unlock commercial EV adoption is smart financing. While OEMs are pushing the frontiers of EV tech, the market has lagged in innovating on the financing front,” said Xitij Kothi, cofounder of Vidyut Tech.
“The lifecycle and the ownership journey of an electric ride are very different from those of an ICE vehicle. The market needs financing solutions tailored for EVs. At Vidyut, we are leveraging EV tech, with support from our OEM partners, to build a technology stack that fundamentally changes the ownership experience.”
Kothi has worked across multiple unicorns, including Swiggy, Rivigo and Flipkart. Vidyut Tech’s other cofounder, Gaurav Srivastava, has worked with EV and shared mobility startup Bounce, as well as the Boston Consulting Group, in the automotive sector, before his stint in Bounce.
“There is huge demand and a continued shift in the strategy of large enterprises across industries, which are now moving their supply chains towards clean energy and welcoming technology solutions,” said Sujeet Kumar, cofounder of B2B ecommerce marketplace Udaan, who participated in the latest funding round. “Yet, to scale big in India, the power lies in unlocking value from small fleet owners and consumers, who will ultimately drive adoption.”
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