A congruence of factors in India — notably, climate change policies, fuel costs and skyrocketing demand for e-commerce — has set up ideal conditions for startups like all-electric commercial vehicle startup EVage.
The startup, which has already supplied five EV trucks to Amazon India’s Delivery Service Partner and plans to provide “in the thousands” more by the end of the year, according to one investor, has just raised a $28 million seed round, led by new U.S.-based VC RedBlue Capital. EVage will use the funds to complete its production-ready factory outside of Delhi in first quarter of 2022 and scale up production to meet growing demand.
EVage’s flagship vehicle is a one-tonne (2,000 pound) truck that was designed for India’s commercial delivery market using feedback from its partnership with Amazon. The truck is developed on EVage’s industry-ready EV platform that the company says allows it to build multiple different types of high quality vehicle at a far lower cost than other OEMs. The startup plans to manufacture vehicles in “Modular Micro Manufacturing” factories, similar to Arrival’s microfactories, which should have smaller carbon footprints and require less capital to produce vehicles than traditional OEMs.
The upshot: EVage aims to pass those savings onto customers.
Finding a way to make production cheaper is vital for scaling, and the opportunity and demand for scaling EVs in India is massive.
India’s Transport Minister Nitin Gadkari, whom Olaf Sakkers, general partner at RedBlue Capital and future EVage board member, says has had a high-level hand in the announcement of EVage’s deal with Amazon, has set a target for the country to have 30% private cars, 40% buses, 80% two and three-wheelers and 70% commercial vehicles electric by 2030.
A series of incentives like the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles schemes (FAME-I and FAME-II) help by providing subsidies to electric two-wheelers and commercial or transit-related four-wheelers. FAME-II subsidies only apply if OEMs source 50% of components from local manufacturers, which helps boost the supply side, as well.
Two and three-wheelers are already well on their way to that target, particularly so with companies like Ola Electric setting up a massive factory for e-scooters and Hero MotorCorp, one of the country’s largest micro-EV manufacturers, penning a deal with Taiwanese battery swapping company Gogoro to build a battery swapping network in India. Four-wheelers are a bit slower to market, in part because the average commuter isn’t buying electric cars. The path to electric four-wheeler adoption, therefore, is more likely to occur through commercial roads, Sakkers said.
India’s e-commerce market is exploding, especially as global companies increase their presence in the country and the mobile-first nation full of smartphone users gets extra comfortable with easy digital transactions. Amazon has invested $6.5 billion in India since it entered the country in 2013, and Walmart entered the South Asian nation through a $16 billion acquisition of the startup Flipkart. Those companies, alongside national and local delivery companies, are looking to partner with Indian OEMs that can meet the unique demands of an Indian market.
“There are some electric vehicles that work in developed markets like the U.S. and Europe, and you see companies like Rivian selling to logistics fleets for those use cases, but the needs of Indian logistics in an Indian market more broadly is very different,” Sakkers told TechCrunch. “It requires solving different problems, and so we see a pretty big opportunity to create custom-built vehicles for these kinds of use cases.
Sakkers noted that from a pure engineering perspective, for example, EVage’s vehicles don’t have to meet the same standards of the west in terms of being certified to drive at highway speeds, because rarely in India do vehicles go above 40 miles per hour. That means everything from motor requirements to battery size and types of materials you need to build are different, and potentially much cheaper, added Sakkers.
“The total cost of ownership savings for the customers is quite significant,” said Sakkers. “They’re not only doing this for optic reasons, they’re also doing it for pure economic reasons. In India, you can’t operate at certain times of day in cities if you produce a certain amount of emissions, so it also improves your ability to operate a logistics fleet if you’re operating electric vehicles.”
“There aren’t many startups that fit into this mold so thats why we’re putting so much capital into EVage,” said Sakkers. “The demand for this segment of vehicles is half a million per year in India. Scaling production to the hundreds of thousands is going to be a challenge for the company, but also a huge opportunity.”
Tech doesn’t get more full circle than this
Welcome to Startups Weekly, a fresh human-first take on this week’s startup news and trends. To get this in your inbox, subscribe here.
Tech innovation is a cycle, especially in the main character-driven world of early-stage venture capital and copycat nature of startups.
The latest proof? Y Combinator this week announced Launch YC, a platform where people can sort accelerator startups by industry, batch and launch date to discover new products. The famed accelerator, which has seeded the likes of Instacart, Coinbase, OpenSea and Dropbox, invites users to vote for newly launched startups “to help them climb up the leaderboard, try out product demos and learn about the founding team,” it said in a blog post.
If it sounds familiar, it’s because — in my perspective — Y Combinator is taking a not-so-subtle swipe at Product Hunt, a nearly decade-old platform that is synonymous with new startup launches and feature announcements.
Y Combinator doesn’t necessarily agree with this characterization: The accelerator’s head of communications, Lindsay Amos, told me over email that “we encourage YC founders to launch on many platforms — from the YC Directory to Product Hunt to Hacker News to Launch YC — in order to reach customers, investors and candidates.”
The overlap isn’t isolated. As Y Combinator makes a Product Hunt, Product Hunt is making an Andreessen Horowitz. Meanwhile, a16z is making its own Y Combinator. Not to mention Product Hunt has investment capital from a16z and formerly went through the Y Combinator accelerator.
The strategy is more than a tongue twister, it’s a signal on what institutions think is important to offer these days (and why they’re starting to borrow more than sugar, or deal flow, from their neighbors).
For my full take, read my TechCrunch+ column, “YC makes a Product Hunt, Product Hunt makes an a16z, a16z makes a YC.”
In the rest of this newsletter, we’ll talk about Coalition, Backstage Capital and Africa’s temperature-fluctuating summer. As always, you can support me by forwarding this newsletter to a friend or following me on Twitter or subscribing to my blog.
Deal of the week
Coalition! Built by a quartet of women operators in venture, Coalition is a fund meets network that is trying to get more diverse decision-makers onto cap tables. The two-pronged approach of fund and network helps Coalition cover multiple fronts: Founders can turn to the firm for capital or the network for advice at no further dilution. Aspiring investors and advisers can turn to the firm to begin building out their portfolio, and LPs can put money into an operation that is committed to broadening diversity on cap tables, known to have economic benefits.
Here’s why it’s important: Coalition co-founder Ashley Mayer, the former VP of communications for Glossier, explained a little about the building philosophy behind the new company.
Mayer explained that she and her three co-founders saw the value of taking a “portfolio approach” to careers, basically going deep on their respective operator roles while also angel investing and eventually scout investing. Three of them previously worked in venture but left it because they missed the experience of operating. Now, they’re trying to scale a way for people to keep their day jobs and build beyond it. Coalition co-founder and Cityblock Health founder Toyin Ajayi said that “as one of few women of color leading a venture-backed company, I feel a deep obligation to hold the door open for others.”
When do layoffs matter? Trick question — always
This week on Equity, we spoke about Backstage Capital laying off a majority of its staff, weeks after pausing any investments in new startups. The workforce reduction, which impacted nine of Backstage Capital’s 12-person staff, was due to a lack of capital from limited partners, per fund founder Arlan Hamilton.
Here’s why it’s important: Backstage Capital has invested in over 200 startups built by historically overlooked entrepreneurs, while Hamllton herself has invested in more than two dozen venture capital funds. Despite having impact, no single firm can be immune from the difficulties of venture (or growing in an environment full of macroeconomic and cultural hurdles). Below is an excerpt of my story.
Without more support, it becomes difficult to close shop on new investments, bring more assets under management and bring more follow-on investments, Hamilton said.
“Somebody asked me, ‘why don’t you have more under management?’” she said during the podcast. “You gotta ask these LPs, you gotta ask these family offices, you gotta ask these people who ask me, ‘how can I be helpful,’ and I say ‘invest in our fund,’ and I never hear from them again.”
Africa charts its own course
TC’s Dominic-Madori Davis and Tage Kene-Okafor wrote a story about how the downturn is playing out in Africa, essentially answering why we should all be tuning into the continent’s activity this summer.
Here’s why it matters: Africa’s venture capital totals weren’t too shabby in the first quarter, but investors think that it may just be a reporting delay. If most of the deals were finalized before high interest rates, the war and inflation, experts say, we may see an economic downturn soon start affecting developing markets. The story doesn’t stop there; I’d read more to see what Tiger Global tells us and how August is shaping up to be a key month of movement.
Across the week
Seen on TechCrunch
Seen on TechCrunch+
Until next time,
Google will start erasing location data for abortion clinic visits
In the aftermath of the Supreme Court’s decision to strip federal abortion rights in the U.S., many people are questioning how the apps they use every day might suddenly be turned against them.
As concerns mount over the endless well of data that tech companies built an entire industry around, Google is taking at least one step to mitigate some potential harm related to location tracking.
The company announced Friday in a blog post that it would remove location history data about some “particularly personal” places from a Google account shortly after someone visits. Locations that will have their data deleted include “medical facilities like counseling centers, domestic violence shelters, abortion clinics, fertility centers, addiction treatment facilities, weight loss clinics, cosmetic surgery clinics, and others,” according to the blog.
Google also noted that Fitbit users who use the device’s companion software as a period tracker currently must delete those entries one by one, but an easier way to “delete multiple logs at once” is on the way.
The change to location history will go into effect in the next few weeks, emptying one potential bucket of data that law enforcement could demand from the company. Google notes that its location history feature is off by default for people who use its services, but if you’re not sure about that, it’s always worth double-checking what personal information you’re actively sharing with tech’s data brokers — particularly now.
Micropyramid lenses triple the light that hits solar panels
Stacks of teeny lenses that look like inverted pyramids could juice up solar panels, helping them capture more light from any angle on both sunny and overcast days.
Solar panels perform best in direct sunlight, which is why some solar systems track the big fireball across the sky, turning to face it for maximum light. Unfortunately, such tracking tech is pricey and moving parts can break.
Shortcomings like these motivated researchers at Stanford to develop an alternative. The resulting tech — named Axially Graded Index Lens, or AGILE for short — offers a way to boost the efficiency of static solar panels, even in diffuse light, authors Nina Vaidya and Olav Solgaard said in a peer-reviewed paper. Prototype arrays of AGILE lenses successfully concentrated light into a 3x smaller area, while retaining 90% of its power in the best-case scenario, and well ahead of more elementary concentrators when the light was more slanted (sometimes concentrators can sacrifice light intensity but come out ahead of gathering angle).
Concentrating light to squeeze more energy out of solar panels is nothing new, but the authors point out that concentrators such as fresnel lenses and mirrors provide only “modest acceptance angles.” Incidentally, the pyramidal design also succeeds in looking glamorous in a render video released alongside the paper.
The internet is littered with neat ideas that could help us capture more energy from the sun. Many are inspired by things in nature, such as butterfly wings, fly eyes, flower petals and even puffer fish. The design for AGILE “did not come from nature,” says Vaidya, but the paper acknowledges that “there are features of AGILE that can be found in the retina of fish (e.g., Gnathonemus) and compound eyes in insects (e.g., Lepidoptera), where a gradient index is present as anti-reflection to maximize transmission as well as to enable camouflage.”
Though the researchers did not announce any plans to commercialize AGILE, the prototypes were designed with the solar industry in mind using readily available materials, according to a Stanford press release.
“Abundant and affordable clean energy is a vital part of addressing the urgent climate and sustainability challenges,” said Vaidya. “We need to catalyze engineering solutions to make that a reality.”
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