Two years after it set up India’s first seed fund focusing on clean mobility and EVs, Micelio Mobility is gearing up for the next phase of growth.
02 Sep 2021 | 5895 Views | By Nilesh Wadhwa
Among the business segments with the fiercest competition worldwide is the automotive industry, one which has led to the survival of the fittest. But when it comes to the electric vehicle ecosystem, for a country like India, it is not competition, but cooperation that will unlock the next phase of ...
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Among the business segments with the fiercest competition worldwide is the automotive industry, one which has led to the survival of the fittest. But when it comes to the electric vehicle ecosystem, for a country like India, it is not competition, but cooperation that will unlock the next phase of growth, believes Shreyas Shibulal, founder and director, Micelio Mobility.
Established in 2019, Bangalore-based Micelio is said to be one of the first seed-funding firms in India to focus on clean mobility and EV space. The organisation has four business verticals — Micelio Fund, Micelio Studio, Lighting Logistics and an EV product company.
Sharing the thought behind the firm’s inception, Shibulal says, “I have been passionate about the automotive industry and sustainability has always appealed to me. With my background in technology, EVs naturally made sense. We started with two verticals of our business — the Discovery Studio and the Fund, which is probably India’s first seed stage fund for EVs with a corpus of Rs 150 crore. In the past two years, we have seen a lot of traction. Most of the seed-stage EV start-ups have applied to us. I think it is very appealing to have an investor who has understanding of the space and can empathise with the start-ups who are working in the space.”
“The Micelio Studio is a designer space which also goes hand in hand with the start-ups in the EV space, not just for our portfolio companies but anyone who wants to come and utilise the space. That has also received a lot of traction, the space hosts various kinds of equipment and the idea is to lower the barrier of entry into the EV space. A lot of equipment that you need to develop the prototype for an EV start-up can be quite expensive. We really want to foster the space by providing them with the necessary tools.”
He adds, “The Discovery Studio in Bangalore has been operational for sometime now. In the commercial side, we have the Lighting Logistics business, which is a pureplay electric last-mile logistics service provider. We started out in Bangalore in early 2019, and now are present in three cities —Bangalore, Chennai and Hyderabad — with a fleet of 1,000 EVs. We are working with large customers in the e-commerce sector, mom-and-pop stores, courier companies and also grocery deliveries. We started with two-wheelers and now have inducted three-wheelers in the fleet. Lastly, we have a product development company and we are looking at developing our own form factor (e-2W) for electric last-mile logistics vehicle,” explains Shibulal.
Lending a hand to start-ups
When it comes to the start-up ecosystem, the lack of relevant support be it financial, technical or mentorship, remains a key challenge most young entrepreneurs face. In addition to funding, the Micelio Studio also provides start-ups a place to connect.
Commenting on the solutions Micelio provides to start-ups, Shibulal says, “Broadly, this can be classified in two parts — one is the development support for components, sub-components, for instance motor test bench, battery test cycle, certain software for our members. That’s the providing infrastructure aspect. The other is the community aspect. We are building a community of EV start-ups, where they can leverage each other in whatever way they see fit. Part of this is to connect them with each other and also release materials jointly created for the benefit of everyone. We believe the community aspect is very important as the space is very nascent. Ultimately, it is about collaboration than competition that you see in other industries. I believe collaboration will be a key, and competencies can be found in different ways in different start-ups.”
Interestingly, since its inception, Micelio has received over 400 applications. On June 10, Bangalore-based EV start-up Cell Propulsion raised $2 million (Rs 14.8 crore) in debt and equity from its existing investors including Micelio. Cell Propulsion builds and deploys electric commercial vehicles (eLCVs and eHCVs) as part of its integrated solution. At present, the start-up is said to be working on Oryx Electric (e-LCV) and Beluga Electric (e-bus) that can attain top speeds of 60kph and 80kph respectively.
“Cell Propulsion is the only company we have invested in so far. But we are fairly confident that this year we will invest in a few more. The total corpus is of $20 million (Rs 150 crore), the average ticket size is Rs 100,000 to Rs 10 lakh,” explains Shibulal.
In FY2022, Micelio expects to invest in another 2-3 potential start-ups. According to Shibulal, while there are plenty of ideas from entrepreneurs, the aim is “to look at core investment opportunities. At very early stage, it goes into taking a prototype development or creating the first prototype. It also depends on the kind of start-up, hardware, sub-component or an end-to-end solution of EVs and go to the market . . . these are longer gestation kind of companies. At such companies, we may come in just to get the product to the market or get the prototype development started. The start-ups that we generally see are more focused towards business solutions. For instance, companies running fleets, deploying charging infrastructure, financing, technology innovation (hardware) and business innovation (solution) — leasing finance, energy as a service. In those companies the capital is used more or less to scale,” remarks Shibulal.
Lighting Logistics and B2B product development
Like it has done to businesses the world over, the pandemic delayed Micelio’s plans to support the start-up ecosystem.
Shibulal says the pandemic has made it difficult for start-ups to “raise capital, as people (investors) are being risk averse. The demand for funding has definitely increased; we have got a lot of people already applying with us and are following up. With the Discovery Studio, we have the same kind of difficulty — how do we keep everyone safe?” As it is a shared space, the challenge is how to ensure everyone’s safety. There is also the impact of lockdown and curfews.
On the other hand, the Lighting Logistics business, which comes under essential services, has seen improved demand. With the pandemic-associated lockdowns and curfews, it has meant more business and last-mile deliveries.
The plan to launch an EV for the last-mile delivery segment was also affected on the back of supply chain disruption. “It has pushed us to become more indigenous and serves as a wake-up call for the rest of the industry. We are currently working on a two-wheeler EV, which will be launched next year,” reveals Shibulal.
When queried as to whether electric two-wheeler start-ups will be able to compete against the big players, he is fairly confident that there is room for start-ups here. “The deal flow for the EV space is increasing every year by significant magnitude. The availability of the capital is definitely increasing. There are pretty large start-ups which are well-funded.”
He believes that when it comes to the debate of charging versus battery swapping, the fact that ‘battery as a service is being encouraged,’ means the choice will be based on the use case. “For two- and three-wheelers, there is a use case for battery swapping. For commuter vehicles, it's fixed batteries. Both offer different features, pros and cons. I believe it will be a mixture of both, until we are able to charge extremely quickly and have higher energy density battery,” responds Shibulal.
With its first studio in Bangalore, Micelio is experimenting with the potential of such a setup in India. In fact, the company is open to establishing similar setups across the country. The overall mission is clear — become a key partner for entrepreneurs in the EV industry.
This feature was first published in August 1, 2021 issue.