Capital A, a venture fund for seed to early-stage investments, has floated a $10 million (Rs 75 crore) cleantech fund ‘Evolve’ to back India startups operating in electric vehicles (EVs), EV batteries, battery technology, battery-as-a-service and battery chargers.
The government’s rolled out steps and achievable economies of scale are expected to drive India’s EV push. Besides, allowing purchase of EVs without batteries and extension of FAME-II Scheme with an outlay of Rs 10,000 crore, can be said to be some of the key drivers for the growth. Further, the Budget 2022 also recommends raising capital support for the industry via several measures.
“We are at the cusp of a mobility revolution in India. The high cost and low operating range of EVs kept them out of the mainstream in the past. However, with fast charging, lowering of costs, and battery swapping services, etc., the range anxiety and cost concerns will soon be eliminated.
What is needed now, is funding support to promising EV OEM start-ups and companies involved in building charging, battery management, and battery technologies segments. We have launched the fund after having developed an active thesis and forging industry partnerships that enabled us to gain deep insights into the Indian EV market, and we aim to back founders building impactful start-ups," said Ankit Kedia, Founder at Capital A.
A key reason behind the launch of ‘Evolve’ is to address the currently underserved area of funding for B2B EV startups. There are several big-ticket announcements being made and players like Ola have entered the market as 2-wheeler makers. However, to make the transition to EVs successful and widespread, India needs charging infrastructure.
Areas such as battery-as-a-service (BaaS), manufacturing, battery management systems to optimize battery life and performance, conversion kits, after-sales support, and OEMs will require funding and technical support to help India become an EV nation as envisaged. This is where ‘Evolve’ will help early-stage startups with capital to develop the products and technologies.
The fund has been named 'Evolve' to narrate the story of the evolution of the Indian EV industry – from the conventional ICE to EV engines now. This is a highly exciting phase, not only for the prominent legacy brands in the automobile sector but also for the EV startups, as they are now getting a democratic platform to build technologies that will help the entire ecosystem in the years to come.
Capital A's strategy will also involve various tie-ups with academic institutions focusing on the EV sector and encourage entrepreneurship in the domain. The vision is to ensure that lack of working capital or mentoring doesn't deter promising EV tech startups from innovating and creating the next big breakthrough in electric mobility.
