Tiger Global’s latest investment in India is Vecmocon, a startup that offers safety and reliability solutions alongside intelligence and health monitoring in light electric vehicles (EVs), addressing concerns limiting sales of electric scooters in the South Asian market.
Unlike traditional internal combustion engine (ICE) vehicles that have been around for over 100 years, EVs are fairly new to the market. Figures recently released by the Indian government show that the country has over 1.3 million EVs, compared to more than 278 million non-EVs. The service cost and running time of an EV in the country is also quite high compared to that of its traditional internal combustion engine counterparts. Some electric vehicles, especially electric scooters, available in the Indian market also do not meet the quality standards. Some have even caught fire in the recent past.
Vecmocon, short for vector motor control, is trying to solve all of this using the basic EV components and software it sells to OEMs. The New Delhi-based startup offers additional platforms for cloud integration to enable remote diagnostics for fleet operations.
“For electric vehicles to happen, their ecosystem has to happen, and that ecosystem has to be data-driven. It needs to be digitally enabled for a fast evolution,” said Peeyush Asati, co-founder and CEO of Vecmocon, in an interview with TechCrunch.
IIT Kanpur graduate Asati co-founded the startup with Shivam Wankhede and Adarshkumar B — graduates of IIT Delhi and Indian School of Business (ISB), respectively, in August 2016. Before launching their venture, the trio provided free advice in e-rickshaw manufacturers. This helped them notice the strong dependence of the industry on China.
“Chinese component makers are not cooperating because the ecosystem in China around EVs is fundamentally different from how it is in India. The geography is different, the use cases of how people use electric vehicles are two-wheelers, kind of culture-wise, from a behavioral standpoint, from a geography standpoint, everything was different,” Asati said.
All of this led them to the conclusion that while many companies have started building the engineering side of things for EVs locally in the market, the core technology side still leaves a lot to be desired.
Vecmocon offers battery management systems, vehicle intelligence units, instrument panels and chargers, among other components. It’s targeting light EV makers that make two-wheelers, three-wheelers, forklifts and electric tractors right now, as those are the lowest-hanging fruit, Asati said.
He believes that electric cars will still take some time to enter the Indian market due to the lack of physical infrastructure, although the solutions that Vecmocon makes are ready for four-wheelers as well.
The co-founder said the startup’s battery management systems comply with Automotive Industry Standards (AIS)-156 introduced by the Indian government last month to address EV battery fire issues. However, safety standards have not yet become mandatory for manufacturers.
“We have already implemented these recommendations in our previous generation and improved them further. So, we are ahead in terms of safety and reliability,” he said.
Now they have secured some much needed fuel to expand.
Tiger Global co-led the $5.2 million pre-Series A round at Vecmocon along with Blume Ventures.
“We are impressed with the deep commitment and progress Peeyush, Adarshkumar and Shivam have made to solve long-term problems in India’s electric vehicle industry, and are excited to partner with them as they build a global, high-quality automotive technology company to support the adoption of electric vehicles,” Connie Lee, partner at Tiger Global, said in a prepared statement.
Funding from the all-equity round will be used to build a business around the offerings created by Vecmocon, Asati said. He noted that the startup plans to hire sales, HR, operations and finance people to the team, which currently has 20 engineers developing different hardware and software solutions.
Vecmocon, which currently uses labs at IIT Delhi, also plans to build its in-house labs to test and develop new offerings for the market.
“An electric vehicle is a technologically advanced product. For most OEMs, it is difficult to develop the know-how to design and refine software and hardware components such as a BMS (battery management system) or VIM (vehicle intelligence module). Such customers can gain significantly by adopting Vecmocon’s platform that allows them to bring high-performance vehicles to market faster. Over the past 5 years, Vecmocon has built a unique capability to manufacture such data-intensive components and deliver a highly robust and secure system,” said Arpit Agarwal, director of Blume Ventures.
In this financial year, Vecmocon claims it already has about $5 million worth of orders to fill — giving it touchpoints on 30,000-40,000 odd vehicles. Asati said the plan is to power more than 100,000 vehicles by next year and reach the 500,000 milestone by 2025.
The startup also doesn’t want to limit itself to India as it has started working in a pilot phase with customers in global markets and has its initial customers in the US, Sri Lanka and Malaysia. Prior to the pre-Series A funding, Vecmocon had raised $300,000 in a strategic seed round in 2019 from Tessellate Tech Ventures. It also received start-up support in a combination of debt and equity from India’s Department of Science and Technology (DST).