EMotorad, an Indian startup manufacturing electric bikes, raised $20 million in a Series B round as it aims to disrupt China’s market domination and expand its presence in global markets.
The three-year-old startup has raised more than $22.5 million in total funding, with Singapore’s Panthera Growth Partners leading the latest round, along with participation from Alteria Capital, xto10x Technologies and Green Frontier Capital — the startup’s existing investor. Additionally, the fresh funding round includes a debt of $2.5 million.
The demand for e-bikes is growing in markets beyond China and India as people seek to reduce their reliance on fossil fuels, ease traffic congestion on the roads and find alternative transportation options that do not require rigorous physical activity throughout their daily commute. In 2021, the World Bank predicted (PDF) that as many as 300 million e-bikes will circulate in cities across the globe by 2023. However, despite growing demand worldwide, e-bike supplies rely heavily on Chinese manufacturers. EMotorad is striving to overturn this trend by establishing its manufacturing operations in India.
“Almost 99% of the world procures e-bikes from China, and that is what we want to change. It’s a $40 billion industry internationally. And we are trying to make a dent in that,” Kunal Gupta, co-founder and CEO at EMotorad, said in an interview.
Gupta co-founded the startup with Rajib Gangopadhyay, Aditya Oza and Sumedh Battewar in 2020 after spending some time in the mobility industry and spending early years in the two-wheeler motorcycle rental space. The Pune-based startup started its journey in the Indian market and expanded its presence to global markets in 2021. The startup exports its e-bikes to more than 18 countries through white labeling and selling its own-branded models. EMotorad has a brand presence in five markets, including the U.S., Europe, Australia, Japan and some Middle Eastern markets.
EMotorad presently has a portfolio of 14 e-bike models, with seven to eight available in India and the rest for global markets. The lineup is priced between $600 to $1,200 in the U.S. and €600 to €1,500 in Europe.
Gupta told TechCrunch that the quality, technology and after-sale service are some of the USPs of EMotorad bikes.
“You can’t always compete on your pricing. But we have a significant uptick in the quality of the product,” the co-founder said. “The batteries and the motors could not have been made smart with a software layer of technology because, of course, it was in an outsourced capacity.”
The startup has a 50-member tech center in Bengaluru that helps develop the proprietary technology, he added.
EMotorad promises to resolve any issues within 48 hours of receiving user complaints. The bikes feature a display that shows an error code to indicate any problems with the motor or battery components. This helps users quickly identify and report issues to the manufacturer for prompt resolution.
The startup assembles batteries, motors and other components at its facility in Pune, which can produce up to 90,000 bikes annually. The company is building a new 150,000-square-foot facility — estimated to be ready in the next three months — with an “in-house smart drive train” to develop all major components, from batteries and motors to displays and chargers natively. It will have a capacity of producing 400,000 units annually, Gupta said.
In addition to its own facility, the startup works with multiple partners across India to fulfill local demand. Even though the country, the world’s largest two-wheeler market, does not have a significant e-bike commuter base at the moment, EMotorad believes it is picking up.
“India’s mobility on electric bicycles has been scaling immensely. There’s a very positive uptick there,” Gupta said.
EMotorad has its presence in 200 stores across the country and is targeting to expand it to 800 stores in the next 18 months.
Last year, the startup sold 40,000 units worldwide, of which 10,000 were sold in India alone. Overall, its sales to date are 80,000 units, generating nearly $36 million in revenues.
“This year, we’ve seen a significant uptick of almost 400% from last year in our domestic business,” Gupta said.
The startup said it generated nearly $2 million in revenues from India last year and aims to grow to about $7.8 million this year.
Globally, EMotorad looks to compete against the likes of Rad Power, Lectric and Cowboy by bolstering its presence in the U.S., Europe and Australia. It aims to expand its global sales to 100,000 by the financial year 2025.
“We strongly believe the market is extremely large enough for multiple players to fit in… Fortunately, in our favor, what is happening is all the Chinese brands that existed until last year are going out of business because of all the legal implications coming on these companies from international businesses primarily from Europe and the U.S.,” Gupta noted.
The startup, which has a total headcount of 160 people globally, has a distribution-led business in the U.S., selling its products through distributors. Similarly, Australia, Japan and the U.A.E. are the franchisee markets for EMotorad. However, it has its own presence in Europe, including warehousing and a small assembly facility located in Spain. It looks to expand its consumer business in Europe by utilizing the fresh fundraising.
“At EMotorad, we have backed a team with a vision trying to build a dominant micro-mobility company out of India for the global markets,” said Shilpa Kulkarni, founder and general partner at Panthera Growth Partners, in a prepared statement.