VC Firm AdvantEdge To Take Bet On Mobility Solution Startups With Its $100 Mn Fund

Early-stage venture capital (VC) fund AdvantEdge has unveiled its third fund to invest $80-$100 Mn in mobility solutions companies.

The new fund will focus on investing in the electric vehicle ecosystem, with eyes on startups that make EVs affordable, via shared mobility, electrification of public transportation, or making ownership of private vehicles economical.

For example, it will invest in startups that lease out EVs to other companies, battery recycling startups, and EV financing companies.

Kunal Khattar, founding partner of AdvantEdge Khattar is of the view that investing in infrastructure companies will yield dividends irrespective of which auto company emerges as the leader as every OEM is looking for a charging partner, a battery recycling partner, finance solutions. While all the OEMs need these ancillary companies to operate, it is the area the fund wants to make bets.

For Fund III, AdvantEdge will invest in three types of deals. It plans to invest one-third of the $100 Mn in seed stage deals, with a cheque size of $0.5-$1.5 Mn. It will also invest in Fund II winners as long-term bets. Besides, it will write cheques for early-stage deals in companies that performed better after the first cheque round.

The development was first reported by YourStory.

Back in 2019, AdvantEdge announced its second fund, AdvantEdge Founders Fund II with a target of raising a corpus of $42 Mn with a focus on mobility startups. It also focussed on investing in early-stage startups across the shared mobility, smart cars, digital auto and logistics domains. 

AdvantEdge’s portfolio startups include Rapido, Chalo, zingbus, Park+, and Sheru, among others.

Despite the funding winter, VC, angel and PE investors announced 26 funds worth more than $2 Bn to support Indian startups at various stages so far in 2023. Last week, Mumbai-based PE firm Multiples Alternate Asset Management announced the first close of its Fund IV, with a subscription of over $640 Mn. Besides, early-stage VC fund Chiratae Ventures also recently announced the final close of its ‘Growth Fund I’. 

AdvantEdge’s third fund announcement comes at a time when the Indian EV market has been gaining attention from the government, which has set a target of having 30% electric private cars, 70% electric commercial vehicles, and 80% electric two and three-wheelers by 2030. 

The government has a strong focus on nine cities that include Surat, Pune, Ahmedabad, Bengaluru, Hyderabad, Delhi, Kolkata, Mumbai, and Chennai. 

However, amid uncertainty around the Centre’s FAME-II scheme, electric two-wheeler registrations dropped around 23% month-on-month (MoM) in April, after seeing a sharp jump in March. A total of 66,410 two-wheeler EVs were registered in April as against 86,187 units in March, as per the May 1 Vahan data.