River, an electric scooter startup, has secured $11 million in funding. The company will use the money to hire more employees, and conduct research and development, among other things.
Electric scooter company River, located in Bengaluru, claimed to have secured $11 million from backers, including Lowercarbon Capital, run by US businessman Chris Sacca.
Toyota Ventures, Toyota’s early-stage venture investing arm, also participated in the round.
According to Sacca, who has also invested in Twitter, Uber, and Instagram, three out of every four cars sold in India are two-wheelers. However, the models that are currently on the market have loud, unclean, gas-burning engines from the previous century. Indian motorcyclists now choose River’s electric two-wheelers above everything else on the market because they are quicker, harder, and just plain cooler.
According to its co-founder Aravind Mani, River intends to use the financing to grow its workforce, invest in R&D, establish a manufacturing facility, and have its first product available for sale by the start of next year.
According to Mani, the business is also negotiating to raise an additional $100 million.
Before the business begins selling its automobiles, the following investment round will occur, he added.
In order to solve a market vacuum, Mani and Vipin George established River in 2020. The “pick-up truck culture” of the West is being replicated in River’s electric scooter, which will offer a sizable amount of luggage capacity.
According to Mani, a significant portion of the Indian market purchases two-wheelers in order to carry loads naturally. For this reason, scooter sales are increasing considerably more quickly than those of motorcycles.
Mani asked, “How can we develop a product for the young, middle-class Indian entrepreneur who juggles several tasks?”
River has an in-house design team that built a vehicle from the ground up and has been operating covertly for some time.
No one goes into a delivery sector believing they will do it forever, he added. We are sort of attempting to explore how we can design a product which can be used for numerous things since people won’t buy a product assuming that they would only use it for delivery.
People only consider mopeds to be utilitarian vehicles. But nobody young would want to buy it since it lacks flair, Mani remarked.
“In order to create an all-electric car that is also fashionable, we are attempting to blend the usefulness and personality quotient. We are currently in the product development stage, and by September we want to have 30 to 50 vehicles on the road. These vehicles will then undergo intensive testing and homologation before going into production the following year,” according to Mani.
The business plans to build modest production facilities with a monthly output capacity of roughly 10,000 automobiles. Hoskote, a town close to Bengaluru, will soon house the first facility.
Mani said that this strategy improves the effectiveness of the business. Mani stated, “We are rethinking the system such that we do not require such a large site to accomplish any of the production.
“By regulating the quality, we can solve the problem quite simply.
Because of this, your suppliers are crucial in this situation. Your suppliers’ level of efficiency and reputation will affect your quality, efficiency, and speed.
Mani states that suppliers are some of the top component manufacturers in the nation, and River will contract out the majority of the manufacturing to them.
To guarantee that quality is maintained, River’s quality control staff will visit suppliers’ facilities.
In the “micro-factories,” the business will put all the parts together. As the need increases, “we can scale it up and have numerous of them around the country,” added Mani.
Additionally, it has relatively low fixed costs and little labour, making it simple to break even.
Mani predicted that the business would have resolved a number of issues by the time it raised its next round of investment, including testing, homologation, and a production site.
Mani stated, “We hope to raise a much larger round, which will enable us launch the product and expand distribution.
River intends to use a distributor business model with specific service sites.