Exponent Energy, which has made a 15-minute rapid-charging technology for electric vehicles, on Thursday said it has raised $26.4 million in a Series B funding round led by Eight Roads Ventures, as the three-year-old startup plans its expansion into other Indian cities.
The funding, which includes a strategic investment from TDK Ventures, also witnessed participation from all existing investors such as Lightspeed, YourNest VC, 3one4 Capital, AdvantEdge VC, and the family office of Hero MotoCorp executive chairman Pawan Munjal.
This marks the first investment in India’s EV space by both Eight Roads and TDK Ventures.
Arun Vinayak, a former executive at e-scooter maker Ather Energy, founded Exponent with his colleague Sanjay Byalal Jagannath in 2020. The company claims to have manufactured a battery pack and charging station that together unlock a 0-100% rapid charge within 15 minutes for EVs with any number of wheels and provide a 3,000-cycle life warranty while using regular Li-ion cells.
With the partnership with TDK Ventures, Exponent Energy aims to further bring down the cost of the technology behind the rapid charging, Vinayak told DealStreetAsia in an interaction.
“Exponent’s focus on the Indian commercial vehicle space is a massive opportunity which constitutes 10% of vehicles but consumes 70% of the on-road energy, with more vehicles transitioning to electric over the next few years” said Aditya Systla, Partner at Eight Roads Ventures.
Exponent has raised $44.4 million in total so far and plans to utilise the fresh funds to expand its footprint in five new cities by FY24. It also plans to expand its offering in the three-wheeler space, which is in the operation and scale-up phase currently; and enter the intercity e-bus segment, which is currently in the R&D phase, in 2024.
The Bangalore-based firm aims to deploy 1,000 e-pumps (charging stations) and have 25,000 EVs powered by Exponent by 2025. The capital raise is towards that goal for the next 30 months, Vinayak added.
He expects the firm to become profitable by FY2025, with a revenue of Rs 600 crore. Currently, the firm earns over Rs 2 crore in revenue, with operations only in Bengaluru.
In August 2022, the firm raised its Series A round of $13 million, led by Lightspeed India, making its first investment and only investment to date in the EV segment in India.
Harsha Kumar, Partner at Lightspeed Venture Partners, said the firm remains bullish on EV opportunities in India and is in talks with several such companies for investment.
“Even in two-tier cities in India, people are a lot more aware than one might imagine. When purchasing a four-wheeler, they often wonder if they’ll need to switch to an electric vehicle in the next three or four years because if you buy a four-wheeler, you’re buying it for many many years typically,” Kumar said.
She said the fundamental challenges in India and Southeast Asia are similar, with cost being a bigger issue in India for electric vehicles. But from an opportunity standpoint, I find India more intriguing. If a fundamentally cheaper vehicle can be built in a developing nation, even people in developed markets would prefer it for its faster charging and lower cost, she added.