VC firms have poured $13.3bn into electric vehicle start-ups so far this year as technology in the mobility space matures
VC firms have poured $13.3bn into electric vehicle start-ups so far this year as technology in the mobility space matures
India has an urgent need to reduce CO2 emissions and reduce pollution. The Air Quality Life Index shows that India is the world’s second most polluted country, with average particulate air pollution levels in some areas exceeding WHO guidelines. Enter electric vehicles.
While funding has poured into electric cars, Indian manufacturer EMotorad has shown that electric bikes also offer huge market opportunity. Straits Research forecasts the global e-bike market will grow at a compound annual growth rate (CAGR) of 10.5% to reach $118bn by 2030. EMotorad raised INR 240mn in pre-series A funding in October co-led by cleantech VC firm Green Frontier Capital, private equity firm LetsVenture, and VC advisory platform Ivy Growth Associates. The Pune-based company develops affordable e-bikes and, unlike the majority of its domestic competitors, is aggressively expanding overseas by selling to the UAE, Japan, and Nepal, with plans to launch in Spain, Italy, Germany, France, and the Netherlands over the next six months.
Preqin’s Company Intelligence dataset shows that EV start-ups raised a record $24.6bn in 2021, with a healthy $13.3bn invested so far this year. China is known for its large EV industry and raft of well-funded start-ups, but since the beginning of 2022, Indian EV companies have attracted an impressive $822mn, more than double the $370mn invested last year, proving the need for electric vehicles in tackling CO2 emissions.
The top 3 VC firms investing in EV start-ups:
1. Sequoia Capital has been the most active EV investor, with 18 deals over the past five years, supporting young companies that develop electric scooters, bikes, and cars. With $80.7bn in AUM, the VC firm dominates VC funding in EV companies at the series A stage, with seven transactions on its record over the same period.
2. SOSV is close behind with 17 deals, investing in companies that develop vehicles ranging from electric scooters to electric grass-cutting and snow removal robots. The VC firm has $1.2bn in AUM and has provided capital to 12 start-ups at the seed stage in the last five years. This makes it the most active investor in seed rounds.
3. Alumni Ventures Group ranks third with 14 deals under its belt, investing in five series A rounds over the same period.
EV technology is here to stay
Driven by innovation, technological change, and consumer demand, VC firms will continue to invest in EV start-ups that might be able to transform the mobility market and address those high levels of CO2 emissions. As soon as our quality of life improves, EV manufacturers, investors, and governments will certainly feel the pressure to keep developing affordable, accessible, and environmentally friendly mobility solutions.
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