River was co-founded by Mani and Vipin George in March 2021 — the middle of the Covid-19 lockdown — with an aim to create an ‘urban lifestyle e-2wheeler’ brand. The duo started off by defining a niche segment with a specialised set of customers and markets. They soon zeroed in on creating an elegant lifestyle product which would also serve the utilitarian needs of the urban Indian.
The company’s strategy of focusing on a tightly defined customer category was based on the belief that it was difficult to create a single brand that could cater to the entire two-wheeler market from 100cc commuter bikes to 400cc sports and adventure models. “We strongly believe that it is very difficult to create a strong consumer brand that will cater to everything. There is a Pulsar 400 but KTM 390 defines sports motorcycling here.
And just as Royal Enfield stands for adventure motorcycling in India or Vespa for a lifestyle brand. Similarly, we picked the utility lifestyle as our sharply defined thing,” said Mani. The company believes that offerings in the automotive space are becoming more and more specific. Rather than a one-sizefits-all approach, companies are looking at niche tailor-made products, catering to a defined segment or customer set. “The market is getting very specialised in terms of customer preferences and is less generic,” Mani noted.
Early Success:
Coming in handy for the duo in creating the new enterprise was their experience at various companies, including the Bengaluru-based electric two-wheeler startup Ultraviolette. Mani was handling commercial and strategy for Ultraviolette, while George has played leadership roles at the R&D and design teams of companies such as Ultraviolette and Honda.
The duo were able to leverage their experience at Ultraviolette to navigate the startup landscape and funding. It has raised a total of USD 68 million in funding over five rounds since its inception. Maniv Mobility and Trucks Venture Capital were the early investors in River. Other investors include Lowercarbon Capital and Al-Futtaim Group.
The latest series B funding round saw investors pouring USD 40 million into River, led by Yamaha, with participation from all the existing investors. Interestingly, all the participants in its various funding rounds came from outside India. River grabbed the limelight when Yamaha and Toyota Ventures announced their investments in the startup.
These Japanese companies are known for their thorough diligence before investing in start-ups at a very early stage. It took almost three or four months for Toyota Ventures to finalise and invest, the co-founders said. The startup was quick to set up a 6,000-square-foot office in Bengaluru with an R&D team of around 250 people focusing on the design part.
Its design studio manages in-house designing for products, experience, accessories and apparel, as well as all related mechanical components. The electrical team handles the battery pack and BMS, while it sources the motor and controller from component makers.
In a market chock-a-block with EV brands desperate for growth at any cost, Bengaluru-based electric two-wheeler startup River Mobility stands apart with its focus on carving out a niche for itself in the “utility lifestyle” segment. “We sold the entire concept that we are going to create a small niche in the market and that is the only way to create an electric vehicle brand,”
Co-founder and CEO Aravind Mani remembers the company’s pitch to investors. “We define the small hill that we want to capture, and then execute it with agility and efficiency.” Indeed, India’s burgeoning electric two-wheeler market is home to more than 100 startups as the scooter category has emerged as the frontrunner in the country’s electrification journey. Many of the startups are banking on the favourable environment created through government subsidies and policies, and remain vulnerable to regulatory changes.
River managed to put its first electric scooter — Indie — into the market within 27 months of starting operations, thanks to the founders’ early success in attracting funds. The co-founders believe in evolving the company on the go, rather than having a big chunk of money before they start executing.
Mani noted that the startup is not focused on aggressive market share expansion or increasing its valuation, but on ensuring that the customer gets the maximum value from the product. “Are we undervalued? Yes, we are undervalued. But does it affect us? It doesn’t. We have all the time to optimise the valuation later. It is more important today to become relevant. At the end of the day, the business has to make sense for three stakeholders — investors, customers and employees,” Mani added.
Future Plans:
The co-founders have set an ambitious target of making the startup a Rs 1,000 crore business by 2026. For the company, the focus in the initial three years has been on setting up a strong R&D operation, and sales. Now, with the first stage successfully behind it, it is looking at expanding its presence to up to 100 cities and raising monthly sales to 8,000-10,000 units by March 2026.
River currently has only one product in its portfolio and plans to launch another utility lifestyle scooter by the end of 2025 or early 2026. When asked about the potential for a potential product partnership with investor Yamaha, Mani said: “Yamaha is a pure play financial investor. We may do things together strategically with Yamaha, but nothing concrete at this stage.” Meanwhile, the first product, Indie, generates volumes of around 350 units across its two locations in Bengaluru. By September, it plans to have a presence in eight cities and sell 800-1,000 units in a month.
It will then increase its footprint to 20-30 cities by March 2025, taking its monthly sales to 3,000-4,000 units. Mani believes River would reach a break-even point at a gross level — meaning that each product sold would not add to the company’s losses — at the 5,000-10,000 units/month mark. The startup believes that it has enough money for the next 18-24 months.
This feature was first published in Autocar Professional’s July 15, 2024 issue.