EV sector has swerved back into funding avenue. But why are investors staying cautious?
Between January-August 2023, deals worth $1.2 billion were announced in the Indian EV (electric vehicle) ecosystem. That’s on track to overtake the funding announced during all of 2022, which saw 131 deals worth $1.9 billion, according to Tracxn, a data intelligence platform.
The sector has witnessed a total of $302 million in funding in Q3 of 2023. That’s a 60% growth compared to the $188 million raised in Q3 2022. Funding has been on an uptrend since Q3 2022, according to Neha Singh, co-founder of Tracxn.
MANY UNICORNS EXPECTED “We should expect to see the first of many unicorns being minted in the EV space in the next two years. We could also see bigger financial and strategic players checking into the top companies,” said Arpit Agarwal, director of Blume Ventures. There could be consolidation in the electric 2W space too. Overall, deal street is going to be busy, he said.
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Blume Ventures, along with Tiger Global and other investors recently invested $33 million (`272 crore) in Battery Smart for expanding its geographical presence and customer base by one lakh by 2025. The lion’s share of the funding that’s flowed into the EV space in 2023 has gone to auto manufacturers, or OEMs – accounting for 38.6% of investment. That’s followed by EV mobility services, including fleet purchases at 25.75% and battery swapping at 21.5% of the total funding amount, according to data collated by Ostara Advisors.
Some of the OEMs which raised funds in this period include Murugappa Group’s TI Clean Mobility, Mahindra & Mahindra, Ather Energy, Simple Energy, River and Kabira Mobility, among others. The EV components segment saw the highest
