In the current crop of e-scooters that have hit the markets in India, River Indie is the only one aiming for a niche — ‘SUV of electric scooters’. The Bengaluru-based start-up, which has raised USD 28 million from top global investors such as Lower-carbon Capital, Toyota Ventures, Maniv Mobility, and Trucks VC is planning a series of additional fundraising rounds, as it scales up its business to reach its 1 lakh capacity, in the coming years. This information was shared by the company’s Co-founder and CEO Aravind Mani.
The River founder described his inspiration for starting an EV company as ‘arising from being jobless during Covid’- “We are focused on building lifestyle utilitarian electric scooters”: Aravind Mani after raising USD 15 million from the Al Futtaim Group, River India plans to ramp up its manufacturing facilities and distribution network. Autocar Professional spoke with Co-founder and CEO Aravind Mani. 19.” That is when he and his Design Team Chief, Vipin George (Chief Produce Officer and Co-founder), realised there was room for a lifestyle 2w EV company. Before founding his own company in 2021, Mani was working as Vice President – Business Operations and Corporate Strategy with Ultraviolette Automotive. Mani shares details of the business and way forward.
How has your journey progressed since your time at Ultraviolette, where you oversaw business operations and corporate strategy? And what is on the horizon?
The mobility and petrochemical industries, where I have extensive experience, have taught me a few things in common for achieving the required scale — evaluating trends to derive actionable insights that will benefit the bottom line. To answer your question, we do have other products in the works, and because we are still in the early stages of our first product, we believe ‘Indie’ is the best way to showcase our expertise to the world. I will say a razor-sharp focus is critical to any strategy, and Indie delivers on it as it ticks all the boxes.
So, is this SUV of scooter positioning a marketing tool, or does it go further in terms of benchmarking with what is currently available?
As part of our product development, we looked at all scooter categories unlike comparing it with electric scooters alone. Even if you look at our website, we do not even mention River as an electric scooter company. We are very clear about who we are as a maker of scooters focused on utility lifestyles which happens to be electric. Hence, we did not benchmark against electric vehicle products only, but all scooters in the spectrum looking at quality, cost, and other parameters to introduce several small utility-oriented features in the product, which will go a long way in the customer experience. Talking about SUVs, the consumer of today wants to make a powerful impression when he is purchasing a two-wheeler or a four-wheeler. The customer wants a powerful vehicle, which is the reason why our styling in our product reflects the SUV-inspired cues.
You said you have plans to raise funds as you scale up. How has your fundraising story been so far?
When we started, we were raising funds in the middle of Covid-19. We were very clear about the kind of capital that we needed to build this, and the kind of investors that were required for the same. We don’t want to have a foot in every pie of the market, such as an entry-level scooter, a mid-priced scooter, and a premium scooter, as a strategy, therefore we’ve produced only one offering. We never told our investors extravagant stories about how we would own the industry in three years. It seldom happens. We’re in this for the next two decades and building a product in the automobile business takes time. As a result, the company’s basic DNA, as well as the Founders’ underlying convictions are important. So our product is the hero, and when investors saw our vision, how we differentiate ourselves, who we target, what our emphasis area is, and our experience, that’s how we got the initial two million dollars. Then we had about 15 prototypes on the road in a year, which helped us net the next 11 million dollars, which allowed us to put up our Hoskote facility, where we created the pre-production, and then we secured another 15 million dollars.
But when you say you want to go to up to 60,000 units, I think you will need more support.
Yes, absolutely. We will continue to raise funds. This is a business that will require us to raise funding over the next one or two years. From the Founder’s team, we intend to continue investing in the manufacturing plant and supporting our R&D capabilities, for which we intend to allocate more than Rs 100 crore, as we do not view it as an R&D budget.
What kind of number would you be looking at maybe three years down the line?
We could be looking at a total investment of around Rs 500- Rs 600 crore. Once funding is secured, our priority will be to scale up the facility and move on with full readiness. Marketing spending would need more focus.
You mentioned that you’re not ruling out other form factors, but you’d like to extend your footprint in the scooter market. When can we expect this to happen?
We plan to launch the next product around 2025, when we will be in about 50 cities. The second product could be released in the second half of 2025.
How do you see electric motorcycles as a form factor catching up?
There is no denying that motorcycles are a big market in India. But the way we see it is not feasible for electric vehicles which are used to travel intra-city. An inter-city use case is being developed and we are also watching how the consumers are engaging with what’s on offer in the marketplace. So as a long-term plan, we may enter the motorcycle space, but in which space, inter or intra-city is too soon to tell.
What are your thoughts on the FAME II subsidies? How prepared are you to make it through without government assistance?
I believe the industry is already preparing to operate without government assistance. The government’s withdrawal of funding was excellent. The government subsidies were not intended to subsidise Chinese products, and those who relied on Chinese technology were hit severely and may struggle to survive. Only organisations with exceptional design and technological capabilities will thrive. That’s wonderful news for the Indian industry.
There’s been a lot of talk on battery swapping where there is a debate on standardisation versus custom-built solutions. What role does battery swapping have?
So, battery swapping is a completely different play. It’s an energy play. It is the last-mile energy distribution. River has no ambitions to enter the battery-swapping market as an OEM. Battery swapping is a solution that has worked in various regions of the world. Will it be effective in India? The only way to know is to wait and see. However, it is difficult because any battery that you learn to swap weighs nearly 10, 12 kg. So, it’s doubtful unless someone is comfortable making, lifting, and swapping a 12 kg pack. Secondly, last year India sold around 7,50,000 scooters. We’ll hit a million this year without battery swapping infrastructure. Consumers are dealing with it on their own. Customers are figuring out how to charge their two[1]wheelers like that of a mobile phone.
So how about acing your distribution plans.
We are opening our first experience centre in Bengaluru, after which we plan to fast-track our distribution plans as we start rolling out the product.
This interview was first published in Autocar Professional’s December 1, 2023 issue.