Fleet Financing

Collaboration, not competition to promote the EV ecosystem

The automotive industry is one of the most competitive industries in the world, the one that has allowed the survival of the fittest. But when it comes to the electric vehicle ecosystem, for a country like India, it’s not competition, but cooperation that will unlock the next phase of growth, says Shreyas Shibulal, founder and director of Micelio Mobility.

Founded in 2019, Bangalore-based Micelio is said to be one of the first startup finance companies in India to focus on clean mobility and the space for electric vehicles. The organization has four business segments: Micelio Fund, Micelio Studio, Lighting Logistics and an EV products company.

Sharing the idea behind the creation of the company, Shibulal says, “I am passionate about the automotive industry and sustainability has always appealed to me. With my background in technology, electric vehicles naturally made sense. We started with two verticals of our business – the Discovery Studio and the Fund, which is possibly India’s first electric vehicle start-up fund with a body of Rs 150 crore. Over the past couple of years, we’ve seen a lot of traction. Most early stage EV start-ups have applied to us. I think it’s very appealing to have an investor who has an understanding of the space and can sympathize with the start-ups that work in the space.

“The Micelio Studio is a design space that also goes hand in hand with the start-ups in the VE space, not just for the companies in our portfolio but for anyone who wants to come and use the space. It has also received a lot of traction, the space hosts various types of equipment and the idea is to lower the barrier to entry into the EV space. A lot of the equipment you need to prototype an electric vehicle startup can be quite expensive. We really want to promote the space by providing them with the necessary tools.

He adds: “The Discovery Studio in Bangalore has been operational for quite some time. On the commercial side, we have the Lighting Logistics business, which is a provider of last mile electrical logistics services. We started in Bangalore in early 2019 and are now present in three cities – Bangalore, Chennai and Hyderabad – with a fleet of 1,000 electric vehicles. We work with large clients in the e-commerce industry, mom-and-pop stores, courier companies and also grocery deliveries. We started with two-wheelers and have now inducted three-wheelers into the fleet. Finally, we have a product development company and we are planning to develop our own form factor (e-2W) for the last mile electric logistics vehicle, ”says Shibulal.

Helping start-ups
When it comes to the start-up ecosystem, the lack of relevant support, be it financial, technical or mentoring, remains a major challenge that most young entrepreneurs face. In addition to funding, the Micelio Studio also offers start-ups a place to connect.

Commenting on the solutions Micelio provides to start-ups, Shibulal says: “Overall this can be categorized into two parts – one is the development support for components, sub-components, for example the test bed of engine, battery test cycle, some software for our members. This is the aspect of providing the infrastructure. The other is the community aspect. We are building a community of electric vehicle start-ups, where they can build on each other as they see fit. Part of this is connecting them to each other and publishing jointly created documents for the benefit of all. We think that the community aspect is very important because the space is very nascent. At the end of the day, it’s about collaboration rather than the competition you see in other industries. I think collaboration will be a key, and skills can be found in different ways in different start-ups.

Interestingly, since its inception, Micelio has received over 400 applications. On June 10, Bangalore-based EV start-up Cell Propulsion raised $ 2 million (Rs 14.8 crore) in debt and equity from its existing investors, including Micelio. Cell Propulsion builds and deploys electric utility vehicles (eLCV and eHCV) as part of its integrated solution. Currently, the start-up is reportedly working on Oryx Electric (e-LCV) and Beluga Electric (e-bus) which can reach top speeds of 60 km / h and 80 km / h respectively.
“Cell Propulsion is the only company we have invested in so far. But we’re pretty confident that this year we’ll be investing in a few more. The total corpus is 20 million dollars (Rs 150 crore), the average size of the banknotes is Rs 100,000 to Rs 10 lakh ”, explains Shibulal.

During fiscal year 2022, Micelio plans to invest in 2-3 other potential start-ups. According to Shibulal, although there are a lot of ideas from entrepreneurs, the aim is to “examine the main investment opportunities. At a very early stage, it’s about developing a prototype or creating the first prototype. It also depends on the type of start-up, hardware, subcomponent, or end-to-end EV and go-to-market solution. . . these are companies with a longer gestation. In such companies, we can come just to bring the product to market or start the development of the prototype. The start-ups that we generally see are more oriented towards business solutions. For example, companies that manage fleets, deploy charging infrastructure, financing, technological innovation (hardware) and business innovation (solution) – leasing, energy as a service. In these companies, capital is used more or less on a large scale, ”notes Shibulal.

Lighting logistics and B2B product development
As it has done for businesses around the world, the pandemic has delayed Micelio’s plans to support the start-up ecosystem.

Shibulal says the pandemic has made it difficult for start-ups to “raise capital because people (investors) are risk averse.” The demand for financing has increased markedly; we already have a lot of people applying with us and we are following. With Discovery Studio, we have the same kind of difficulty: How do you keep everyone safe? As this is a shared space, the challenge is to ensure everyone’s safety. There is also the impact of containment and curfews.

On the other hand, the Lighting Logistics activity, which falls under essential services, saw an improvement in demand. With the closures and curfews associated with the pandemic, that has meant more business and last mile deliveries.

The plan to launch an electric vehicle for the last mile delivery segment has also been affected by the supply chain disruption. “It pushed us to become more indigenous and serves as a wake-up call to the rest of the industry. We are currently working on a two-wheeled electric vehicle, which will be launched next year, ”reveals Shibulal.
When asked if electric two-wheeler start-ups will be able to compete with the big players, he’s pretty confident that there is room for start-ups here. “The business flow for the EV space is increasing significantly every year. The availability of capital is clearly increasing. There are quite large start-ups that are well funded. “

He believes that when it comes to the debate between charging and replacing the battery, the fact that “battery as a service is encouraged” means the choice will be based on the use case. “For two and three wheelers, there is a use case for battery swap. For commuter vehicles, these are fixed batteries. Both offer different features, advantages, and disadvantages. I think it will be a mix of the two, until we are able to charge extremely quickly and have a higher energy density battery, ”Shibulal replies.

With his first studio in Bangalore, Micelio is experimenting with the potential of such a setup in India. In fact, the company is open to establishing similar facilities across the country. The overall mission is clear: to become a key partner for entrepreneurs in the electric vehicle industry.

This feature was first published in the August 1, 2021 issue.

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