It was in March 2021, Hyderabad-headquartered BikeWo started its journey as a multi-brand electric two-wheeler business, and despite the pandemic it has slowly and gradually expanding its footprint sustainably across the country. In fact, it has already operationalised 57 stores and 18 more will be added by next month.
What’s more, in a recent exclusive interaction with Financial Express Online, Manideep Katepalli, Co-Founder, BikeWo revealed that the company is in the “advanced stages of filing DHRP (draft red herring prospectus)” or offer document, the plan is to go public. The company has also planned to scale up its footprint 5-6x across India by having 300 stores by 2026.
The company aims to facilitate and introduce smaller and newer electric vehicle brands across the country, who may not have very deep pockets or want to follow a CAPEX-light model.
Inception of BikeWo
Before the likes of premium offerings from Ather Energy, Ola Electric, Vida by Hero, TVS Motor Co and Bajaj Auto entered the electric two-wheeler space, the sector was dominated by the likes of Hero Electric, Okinawa, Ampere, and a few other brands.
The majority of sales in the electric two-wheeler segment was and continues to come from mass-market, city-speed and low-speed electric scooters. And in this segment, not all OEMs have the privilege to go aggressively towards setting up of a massive footprint dealership and aftersales network. This was the challenge and an opportunity, BikeWo focussed on.
“Every geography you look at, there will be few brands and models doing better than its competition. And in some geographies it will be the other way round. For example, if you talk about loaders/cargo variants there is a lot of demand for them in Andhra Pradesh and Telangana. But we are not able to sell loaders in Gujarat because there is no demand there. Even within a state, certain brands are doing better in a particular pocket, while another region will see a different brand dominate sales,” shared Katepalli.
BikeWo has invested around Rs 8 crore till now its business. It has already onboarded and retails 10 brands – BattRe, EVTRIC, Gemopai, Jitendra EV Tech, Pure EV, EMotorad, GHM, Hero Lectro, Revolt, and Bounce – through its multi-brand EV dealership network.
Interestingly, the company counts the like of Tollywood actor Venkatesh Daggubati who has not only been the brand ambassador of the company but also was amongst one of the earliest strategic investors in BikeWo.
“For brands like Bounce or PureEV, if you want to take their exclusive dealership, the investment is as high as Rs 80 lakhs to Rs 1 crore. For someone in, tier 2 or 3 or 4, to invest a crore of rupees on one brand (in the e2W), it doesn’t make sense. But if they become part of BikeWo the investment is a small percentage of what they may need to invest on 1 big brand. But here you also get the potential of BikeWo and all the associated brands too,” he explained.
He says it is very challenging for all these brands to set-up their own network across India. And on the other hand, if these OEMs tie-up with BikeWo they automatically have the ability to mark their presence across the country. The company is currently present in 7 states – Andhra Pradesh, Telangana, Tamil Nadu, Gujarat, Maharashtra, Rajasthan and Karnataka.
Business model
At present, there are a handful of players in the multi-brand electric two-wheeler space – Blive and Greaves Retail. When queried about competing with them, he said, “Blive started much earlier than us, today they have 15-odd stores. And Greaves Retail’s focus, as far as I know, is more on three-wheeler space than two-wheeler.”
On the other hand, the franchise partners can have a margin “anywhere between 6% to 17%. It varies from brand to brand and model to model.” Accessories and insurance are another revenue sources for BikeWo and its partners.
At present, he says that a franchise is selling anywhere between 9 to 12 electric two-wheelers a month. Last year, BikeWo sold 1,800 electric two-wheelers, and this year it expects the sales to cross 5,000 units.
When queried about profitability, Katepalli says BikeWo is in the green. “We are currently working, building our brand and sales organically. We are profitable. For FY2024, we expect to have a revenue of over Rs 20 crore and will have a net profit not just EBITDA. Next year we are taretting sale of over 5,000 units which will translate to revenue of over Rs 45 crore.”
While, Katepalli has not revealed the exact quantum of funding raise the company aims for, he has revealed that BikeWo will go public soon.
The company also is in advanced talks to onboard two e-motorcycle manufacturers, and also may mull tying up with other EV makers to offer aftersales service.
When queried about his views on the FAME subsidy, he says that most mid-level brands do not get the subsidies as a result the pricing has been stable for them. And for brands which are currently getting the subsidies, their prices will go up, if in case the FAME scheme does not get extended or provides for a similar level of support.
