Global funds in the driver’s seat, electric vehicle finance companies go full steam ahead

Sustainability-focused funds such as Northern Arc Capital, Delta Corp Holdings and Incofin Investment Management are buying Indian fintech companies specializing in electric vehicle (EV) financing to accelerate the adoption of two- and three-wheelers that use the electric drivetrain. .

Rev Fin, OTO, Mufin Finance and Three Wheels United are among the fintech firms that have secured equity or debt financing from Northern Arc Capital, Shell Foundation, Delta Corp Holdings, Incofin Investment Management, Matrix Partners India, Prime Venture Partners, 9Unicorns and Better Capital: global and local funds that support green initiatives. These associations seek to route loans for the purchase of electric vehicles to the unbanked and those without the necessary banking services, experts said.

A few months ago, digital electric mobility lending platform Revfin raised ₹100 crore of debt financing, led by Northern Arc, Liquiloans and the Shell Foundation, a UK-registered charity. This will help Revfin expand e-rickshaw financing businesses in new states like Assam, Madhya Pradesh, Rajasthan and Punjab, said Sameer Aggarwal, founder and CEO of RevFin.

“The latest funding inflow will help us overcome multiple barriers in the electric vehicle financing space in a structured way,” said Aggarwal. “Having experienced more than 5x growth in monthly outlays, we have built partnerships with all major e-rickshaw OEMs and are also planning to introduce our next capital raise.”

For global funds, these partnerships are also key to achieving sustainability goals.

“We are partnering with RevFin to finance electric mobility, a rapidly evolving segment that can help reduce carbon emissions and lead to sustainable development,” said Bama Balakrishnan, COO of Northern Arc Capital.

Similarly, Mufin Green Finance this month raised Rs 45 crore in Series A funding from Incofin India Progress Fund.

Price Influences Electric Vehicle Purchase Decisions

The company has helped finance the purchase of electric vehicles worth Rs 160 crore in nine states. Mufin Green Finance also finances electric vehicle charging stations and loans to recharge batteries, in addition to financing the purchase of vehicles.

Two-wheeler financier OTO raised ₹6 crore last month from debt venture firm Stride Ventures. That funding round comes nearly a year after OTO raised $6 million in Series A funding, led by Matrix Partners India. Three Wheels United (TWU) has also raised $10 million in Series A funding led by Delta Corp Holdings. The lack of affordable financing options for low-income consumers stands in the way of faster adoption of electric vehicles despite some decline in vehicle costs.

“The rate of adoption of electric vehicles in India is moving slowly, mainly because they are not priced equivalent to conventional vehicles and come at a premium,” said Rohit Mehta, managing director of Akasa Finance. It influences purchasing decisions. Meanwhile, established non-bank lenders remain cautious about lending to this segment of the auto industry. That is a gap fintech companies are looking to fill.

“We are able to meet the financing requirements with flexible EMI options, which makes the purchase much easier,” said Sumit Chhazed, CEO and co-founder of OTO.

OTO has links with some of the largest two and three wheeler companies in India including Hero MotoCorp, TVS Motor, Bajaj Auto and Suzuki. The platform offers 35% lower EMI compared to other banks.

India’s electric vehicle financing market is likely to be worth $50 billion (₹ 4.1 lakh crore) by 2030, when 30% of private cars, 70% of vehicles commercial vehicles and 80% of two- and three-wheelers use the electric powertrain.

Venture capital fund Blume said sales of electric two-wheelers are expected to grow 24 times their current volume in India by 2030 to 17.69 million units, against a projected volume of 0.75 million. this year.

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