“The funds raised would be invested in getting the prototype bikes into production over the next three quarters, scale up operations, expand the team and also further invest in the R&D of in-house developed lithium-ion battery technology,” said one of the three, requesting anonymity.
Part of the funds will be raised via equity and a small portion of debt in series C next year, said another person, adding that the four-year-old startup is currently valued at $50 million.
“Electric vehicle manufacturing is a very capital-intensive domain. This means that it is not just about early-stage R&D or growth capital or international expansion. There are multiple stages a company will have to go through. For us, this is just the beginning,” said Niraj Rajmohan, founder and CTO, Ultraviolette Automotive, declining to disclose details of the planned fundraising.
Ultraviolette is talking to several strategic investors who can help the startup beyond primary funding-related requirements.
“Our investors will be strategic as they will bring not only funding but also capabilities around IPR, branding, scaling up operations overseas at the right time, among other areas,” said Narayan Subramaniam, founder and chief executive officer at Ultraviolette, which currently has a team of 55.
The Bangalore-based startup had unveiled pre-production versions of its first electric motorcycle — named F77 — in November last year. Planned in three variants — lightning, shadow and laser — the founders at Ultraviolette plan to position the bike as India’s first performance-oriented electric motorcycle and price them in a range of ₹3-3.25 lakh, on-road.
Thus, it cannot look at availing government subsidies granted under the Fame-2 scheme (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India). The subsidies under Fame 2 are available for electric two-wheelers priced below ₹1,50,000.
The commercial launch of F77 was delayed because of the pandemic and is now slated for mid next year.
Last month, Venu Srinivasan-led TVS Motor had increased its stake in Ultraviolette from 25.76% to 29.48% by putting in an additional ₹30 crore, which was part of Ultraviolette’s series B funding. The maker of Apache range of motorcycles had earlier invested ₹11 crore in the Bengaluru-based startup including ₹5 crore in the latter’s preference shares last fiscal.
The latest funding was part of a larger series B round and funds will be used to carry out final testing, getting the bikes to production, among others, Rajmohan said.
“By 2023-24, we are looking to be a dominant player in the electric mobility segment. We are developing a lot of the battery technology in-house, we are also working on the other parts including the vehicle architectures and their scalability to different segments and platforms. We are more of a technology company in the automotive industry,” said Subramaniam.
The startup aims to produce and sell up to 10,000 units of the F77 in the first 12 months of its launch.
According to the founders, the startup’s existing R&D and assembly set-up in Bangalore will be enough to cater to the first year’s volumes. “We have other plans in the pipeline as well. As things scale up, we will be looking beyond our existing facility,” added Rajmohan.