Commercial electric vehicle (EV) financing startup for small and medium businesses Vidyut has raised $10 million in its latest Series A funding round, the company announced on Tuesday. The round, a mix of equity and debt, was led by investor 3one4 Capital and saw the participation of new and existing investors including Saison Capital, Zephyr Peacock, Force Ventures, venture debt fund Alteria Capital and CEO of Udaan, Sujeet Kumar.
The company said it will deploy the capital to expand its offerings from EV financing to EV insurance, lifecycle management, and EV resale as well with a presence in 40 cities ahead and doubling its team size by the end of financial year 2024-25.
“Vidyut provides a unique hybrid financing solution, dividing the cost structure for our customers. We finance the chassis (vehicle minus the battery) through a three to five-year term loan, while the battery is funded through a pay-as-you-use model, with customers paying Rs 1.3-2.5 per km for battery usage,” Xitij Kothi, Co-Founder, Vidyut told FE Aspire.
For any battery issues, the startup takes care of repairs or replacements. When the battery reaches the end of its life, the company replaces it at no extra cost to the customer to alleviate concerns about battery longevity and high replacement costs.
For a 3W Cargo EV typically priced at Rs 4 lakhs, Vidyut enables customers to acquire it for only Rs 2.5 lakhs through a term loan. The additional cost is incurred based on usage, ranging from Rs 1.3-2.5 per km.
Compared to a 3W diesel cargo vehicle priced at Rs 3.5-3.8 lakhs with fuel costs of Rs 4-4.5 per km, Kothi said, “our EV offering demonstrates a clear Total Cost of Ownership advantage – it’s more affordable to purchase and operate. Vidyut’s revenue streams come from both the loan and the battery lease, facilitated through our NBFC partners.”
Right now, the startup makes revenues on the chassis loan and battery subscription. Vidyut also has an EV resale arm. In the next few months, it plans to offer servicing, maintenance and insurance.
Started in November 2021, Vidyut said its disbursal rate has doubled every quarter for FY22 and FY23. “In FY24 our disbursals are already 3X of last FY23,” said Kothi. The company enables financing for SMBs via partnerships with NBFCs and banks to purchase EVs from OEMs including Mahindra, Piaggio, Altigreen, Murugappa Group’s Montra Electric, Euler Motors and OSM.
“Electric vehicles pose new underwriting and product structuring challenges to financiers. EVs also meaningfully expand the role of data in the lifecycle of a financing journey and make new lending models possible. Vidyut’s model removes EV adoption barriers, especially in the large but price-sensitive driver cum owner segment,” said Sonal Saldanha, Vice President, Investments, 3one4 Capital.