EV financing startup Vidyut raises $4 million in seed funding
- ByStartupStory | December 9, 2022
In a round headed by Force Ventures, Veda VC, and a number of strategic angel investors in the clean-energy sector, Vidyut (VT), a platform for EV financing and vehicle lifecycle management, has secured $4 million in a mix of equity and debt, the firm announced on December 8.
The seed round also included participation from the cofounders of Udaan, Sahil Barua, cofounder and CEO of Delhivery, Kunal Shah, cofounder of CRED, Sriharsha Majety, cofounder of Swiggy, and Rajat Verma, cofounder of Lohum.
The business will utilise the money to move into other cities, and in a year, it hopes to increase the size of its credit, engineering, and sales teams. “We’ll expand the product to OEM partners and international markets. The headcount will also be doubled, according to co-founder Xitij Kothi. The majority of Vidyut’s business was concentrated on Bengaluru and Delhi, but Kothi said that with the fresh capital, the company was considering Chennai, Hyderabad, and Pune.
Kothi and Gaurav Srivastava founded Vidyut in 2021 with the goal of making commercial EV ownership a risk-free and cheap option for clients. A hybrid financing model comprising a car loan with a battery subscription, which reduces the upfront cost of an EV by 40–50%, and a conventional term loan plan are the two ownership options provided by VT.
VT is able to extract a high residual value for EVs using battery health data and its unique underwriting process, assisting consumers in receiving an effective interest rate of 7%. This virtually matches the ROI that PSU banks provide for conventional autos with internal combustion engines (ICE).
Because an EV operates very differently from an ICE vehicle, traditional financiers find it challenging to underwrite them, which explains why financing penetration is much lower. Currently, 80 percent of commercial EV owners are small business owners, and our goal is to make financing simpler for everyone, according to Kothi.
Although the company isn’t in the passenger vehicle industry, it does have long-term aspirations to provide financing for retail passenger automobiles.
Vidyut’s solution is one of the few that addresses the nuances of the EV ecosystem and uses technology to solve one of the biggest pain points in the sector, according to Udaan founder and angel investor Sujeet Kumar. “To scale big in India, the power lies in unlocking the value from small fleet owners and consumers who will ultimately drive the adoption,” he added.
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