VCs chase auto parts makers to hitch a ride on EV journey
(This story originally appeared in on Jul 01, 2024)
A number of smaller electric vehicle (EV) component makers, many of which started in other businesses, are seeing increasing interest from venture capital funds, given the boom in the market.
These firms often pivoted from their earlier businesses to fill gaps in services provided by larger manufacturers, while also providing extensive design-to-manufacturing services to customers such as original equipment manufacturers (OEMs).
Gurgaon-based Indigrid, for instance, started with the manufacture of TV set top boxes, before moving to electric vehicle parts such as motor control untis (MCUs) and instrument clusters over six-seven years. Matel started off as a solar water pump manufacturer in 2016 before starting EV part manufacture in FY21. Both the firms saw their maiden institutional funding only in May-June of 2024.
Such firms have raised funds to expand operations as local demand for EV parts has shot up, opening up the space that has been traditionally dominated by large manufacturers like Sona Comstar and Sterling Gtake.
The newer firms also try to provide full-stack solutions. Indigrid, for instance, makes MCUs, vehicle control units (VCUs), battery management system (BMS) and DC-DC converters, among other components.
“A lot of the large players are very specialised, like Sona Comstar which is mostly focused on motors and not on MCUs or VCUs… Design changes with the likes of Sterling Gtake and Bosch can be very expensive and take a long time,” said Matel
