Electric commercial vehicle manufacturer Altigreen has raised Rs 300 crore ($ 40 million) in a fresh funding round led by Sixth Sense Ventures, along with Reliance New Energy (a wholly-owned subsidiary of Reliance Industries Limited), Xponentia Capital, Accurant International, USA and Momentum Venture Capital, Singapore.

Altigreen said this is the largest round made in the last mile transportation segment at this stage of financing by VCs. The company will utilise the resources to boost manufacturing capacity, launch new products including light commercial vehicles and strengthen the company’s presence across the country.

Amitabh Saran, cofounder, Altigreen, told ET, “If you look at the last mile delivery segment, the requirements are best suited to what electric vehicles have to offer. These vehicles – be it two-wheelers, three-wheelers or small four-wheeler commercial vehicles – have a consistent daily driving range, fixed load carrying capacity. Electric vehicles are not only cleaner, the operating economics are far superior when compared with fossil-fuel driven ones. We see massive potential for growth in the electric commercial vehicle segment and will focus on the space.”

For one, the running cost of an electric three-wheeler stands at Rs 0.90 per km, compared to Rs 3.5/4 per km for a diesel driven one. The running cost of a four-wheeled small commercial vehicle is even higher at Rs 7.5-8 per km. Saran said even after factoring in the higher purchase price (an electric three-wheeler will cost 10-15% more than its diesel counterpart), total cost on ownership is lower by 50-85%, said Saran.

Altigreen has on-road a cargo three-wheeler on sale across a dozen cities, at present. The company aims to expand its presence nationally and have point of sale in 60 cities in the next 15 months. These would be spread across metroes, as well as Tier-I/II towns and cities. Work is also underway to increase manufacturing capacity at its facility in Bengaluru (Karnataka) to 40,000 units per annum in the next six months.

On the product side, the target is to have 3-5 vehicles in its portfolio in the next 2-3 years. “A good part of the investment will be in R&D. We have on-board investors who are also bringing their expertise to the table. For one, Reliance New Energy is investing heavily in non li-ion batteries and we get access to those technologies”, said Saran.

Commenting on the investment, Nikhil Vora, Founder & CEO of Sixth Sense said, “Altigreen fits perfectly well into the Sixth Sense philosophy of backing first-generation founders, disrupting large categories ($7bn+ of last-mile logistics opportunity) for the consumer of tomorrow (EVs emerging as the future of mobility). Further, we draw comfort with Altigreen’s primary focus on the 3W segment within the EV space – which fundamentally is less cluttered and under-penetrated, as well as benefits multiple stakeholders in the value chain (from ecommerce players to consumers).”

To be sure, Niti Aayog CEO Amitabh Kant had earlier told ET that in the next two years, all urban delivery vehicles must go completely green. The government think tank already has onboard 30 companies including Mahindra Electric, Tata Motors, Zomato, Sun Mobility, Lightning Logistics, BigBasket, Blue Dart, Hero Electric and Swiggy for the recently launched Shoonya initiative.

The objective of the initiative is to facilitate faster transition to green technologies in the urban delivery segment to reduce emission, and simultaneously leverage the volumes to enable establishment of a charging infrastructure and vendor base for EVs. Given the rapid growth in ecommerce — accelerated now by the pandemic — as many as 8 million vehicles are expected to be on the road in the urban delivery segment alone by 2030.

Altigreen is an eleclric vehicle technology and solutions company for commercial last mile transportation through 2/3/4 wheeled vehicles. Its current patent portfolio spans 60 countries with 26 global patents. Altigreen is a private limited company incorporated in India on February 8， 2013. The turnover of Altigreen for FY 2018-19， FY 2019-20 and FY 202021 was Rs.193.53 lakhs， Rs.61.62 lakhs and Rs.103.82 lakhs respectively.

Prior to this round, Altigreen has raised Rs 56 crore from from Ajay Sarupria, Jupiter Capital, Sterling Tools, Phi Capital and HiTech Gears among others. This Series A fund raise was ably supported by boutique investment banking firm Four-S and Ostara Advisors, India’s first Electric Mobility focused investment bank.

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