EV Financing Startup Vidyut Bags $4 Mn Funding From Force Ventures, Veda VC, Others

Commercial electric vehicle (EV) financing and vehicle lifecycle management platform Vidyut (VT) has raised $4 Mn in a mix of equity and debt in its seed funding round. It was co-led by Force Ventures and Veda VC, and also saw participation from many strategic angel investors in the clean energy space. 

Udaan cofounder Sujeet Kumar, Delhivery cofounder and CEO Sahil Barua, CRED’s Kunal Shah, Swiggy’s Sriharsha Majety, and Lohum founder and CEO Rajat Verma were a few major participants in the round.

Vidyut plans to use the fresh funds to double the headcount in its credit, engineering, and sales teams in the next 12 months.  

“The biggest consumer need to unlock commercial EV adoption is smart financing. While OEMs are pushing the frontiers of EV tech, the market has lagged in innovating on the financing front,” Vidyut cofounder Xitij Kothi said. 

The lifecycle and the ownership journey of EVs are different when compared to that of internal combustion engine (ICE) vehicles as the chassis and battery of EVs have different longevity levels. Hence, the EV market needs financing solutions tailored for it, he told Inc42. 

“At Vidyut, we are leveraging EV tech, with support from our OEM partners, to build a technology stack that fundamentally changes the ownership experience,” Kothi said.

He cited the high upfront cost of EVs, coupled with lower loan-to-value financing, as the reason for the slower adoption of EVs in the commercial vehicle segment. Besides, the uncertainty around battery life and its high replacement cost are a major anxiety for buyers, he added. 

Currently, the buyers are also unable to determine the residual value of the vehicle, and a non-existent resale market increases this stress and the perception associated with the risk of owning EVs, the cofounder said.

Founded in 2021 by Kothi and Gaurav Srivastava, Vidyut claims to make commercial EV ownership simple, affordable, and a risk-free proposition for customers through its unique ownership plans. 

Vidyut offers two ownership plans — a hybrid financing model for vehicle loans with a battery subscription, which brings down the upfront EV cost by 40-50%, and a traditional term loan plan.

Using battery health data and its proprietary underwriting model, the EV financial startup extracts a high residual value for EVs, helping customers get an effective interest rate of as low as 7% while buying the vehicles. Though EV commercial vehicles are costlier than ICE vehicles, this rate is almost at par with the ROI offered by the PSU banks for conventional vehicles with ICE engines, the startup claims.

In a statement, Vidyut said that its differentiation lies in its one-of-a-kind battery subscription ownership plan powered by proprietary asset-underwriting algorithms. The startup already offers ownership solutions for Mahindra, Altigreen, Euler, and OSM vehicles. 

With the fresh infusion of funds, the startup is looking at tapping more OEMs as partners and increasing its presence to more geographies.

“There is a huge demand and continued shift in the strategy of large enterprises across industries which are now moving their supply chains towards clean energy and welcoming technology solutions. Yet, to scale big in India, the power lies in unlocking the value from small fleet owners and consumers who will ultimately drive the adoption,” said Udaan’s Kumar.

He said that the solutions offered by Vidyut address the nuances of the EV ecosystem and solve one of the biggest pain points in the sector using technology.

Vidyut competes with the likes of RevFin and Three Wheels United in this space.

The number of EVs in the commercial segment, particularly in the three-wheeler space, have been on the rise in the country. As per data available on Vahan portal, the registration of transport three-wheeler EVs rose 11% month-on-month to 38,727 units in November.

The total number of vehicles registered in the category stands at over 3 Lakh so far in 2022 as against 1.5 Lakh in 2021.

Consequently, the EV financing space in the country has been attracting a lot of interest. In October, Delhi NCR-based RevFin raised $10 Mn in a mix of equity and debt financing in its Series A round from Green Frontier Capital (GFC) and more investors.

Earlier this year, Three Wheels United also raised $10 Mn in its Series A funding round led by Delta Corp Holdings.

Government think-tank NITI Aayog aims to achieve EV sales penetration of 70% for commercial cars, 30% for private cars, 40% for buses and 80% for two and three-wheelers by 2030.