November has not started on a good note for the Indian startup ecosystem as venture capital (VC) funding came in around the $ 100 million level. This is mostly likely due to lower activity given that the year is coming to a close.

The total funding for the first week of November stood at $101 million across 21 deals. In comparison, the previous week saw a total amount of $289 million.

This lower amount of funding for the week was largely due to the absence of large deals. Additionally, the months of November and December generally tend to see lower activity as it is the last two months of the year.

Now the Indian startup ecosystem will start to prepare for next year and it is unlikely there will be any dramatic change. The VC inflow is expected to remain steady with no major downside expected in the present environment.

The Indian startup ecosystem saw heightened activity during the week with the IPO of Swiggy getting subscribed more than three times. The numbers from Ola for the second quarter were a mixed bag.

Key transactions

Easy Home Finance raised $35 million from Claypond Capital, Asia Rising Fund, Xponentia Capital, Finsight Ventures and Harbourfront Capital.

Fitness brand Boldfit raised Rs 110 crore ($13 million approx.) from Bessemer Venture Partners (BVP).

Spacetech startup GalaxEye raised $10 million from MountTech Growth Fund, Mela Ventures, Speciale Invest, ideaForge and Samarthya Investment Advisors.

Robotics startup CynLr raised $10 million from Pavestone, Athera Venture Partners, Speciale Invest and Infoedge (Redstart).

Drone technology firm Marut Drones raised $6.2 million from Lok Capital.

Hala Mobility raised Rs 51 crore ($6 million approx.) from a network of angel investors and family offices.

Backpacker hostel brand The Hosteller raised Rs 48 crore ($5.6 million) from V3 Ventures, Blacksoil, Synergy Capital Partners and Unit e-Consulting.

Service infrastructure in EV is also not just an Ola problem, it’s an industry problem, Bhavish Aggarwal, CEO of Ola Electric, said during the company’s second quarter earnings call on Friday.

“… it’s an industry problem because training the mechanics in EV, battery maintenance, motor, electronics, software, all these are new things. So, we are investing effort into doing this, which I believe is probably the last leg of confidence customer needs,” Aggarwal said.

Earlier this month, the Central Consumer Protection Authority (CCPA) issued a show cause notice to Ola Electric, citing alleged violations of consumer rights, misleading advertisements, and unfair trade practices.

Addressing recent reports of 80,000 monthly service interactions, the Ola Electric founder clarified that these figures arise from routine maintenance and minor inquiries, and are not solely complaints. He added that 80,000 per month is not bad for a company with 8 lakh vehicles in operation, if majority of them are scheduled or minor queries.

“I think there are a lot of numbers floating around. Even if you take the 80,000 number from the press, if you think of any typical OEM product, it has one to two scheduled maintenance per year. If you have, let’s say, a million install base, that’s one and a half to 2 million service touch points per year. Now that makes it about 1.25 lakh a month,” he explained.

The company, which recently debuted on the Indian stock exchanges, posted a net loss of Rs 495 crore for the July-September quarter, narrowing from Rs 524 crore in the same period last year. However, its losses widened from Rs 324 crore on a quarterly basis.

The company saw its revenue from operations jump to Rs 1,214 crore in Q2 FY25, up from Rs 873 crore a year ago.

The Softbank-backed firm clocked a 73.6% increase in scooter deliveries, with 98,619 units sold this quarter compared to 56,813 units last year. As per the shareholder letter, the company’s gross margin rose by 12 percentage points to 20.3%, while the EBITDA margin fell by 17.6 percentage points to -28.4%.

Aggarwal added that the company will see growth over the next few quarters.

“The fundamentals of the EV transition of India remains very strong. As a leader of this transition, we feel confident to be a leader of this inflection point. As we launched our mass market portfolio a couple of quarters back, this quarter came into its own, we were able to supply it almost full demand. Quarter on quarter, our mass market products, the S1X portfolio grew 15%. Despite the growth in mass market, our premium market products continued to be a majority of our revenue,” he said.

Aggarwal revealed that Ola Electric is also developing three-wheelers and plans to launch 20 new products over the next two years, aiming to release at least one new product each quarter.

It also plans to expand its distribution network to 2,000 stores by March 2025 from the current 782 locations, alongside scaling its Network Partner Program.

“We think of firstly product and then volumes. Brand is an outcome of product experience of the customer and, obviously, at the scale at which we do it. Our premium products are holding very good, with our market share in the premium segment, in the S1 Pro or the S1 Air segment, being fairly high,” Aggarwal said.

In August, at its annual event Sankalp, Ola introduced the Roadster motorcycle series, with the first deliveries set for March 2025. The series includes models across mass and premium segments, priced between Rs 74,999 and Rs 249,999, featuring three models and eight variants.

“We have 782 company-owned stores as on September 2024, with each store delivering 130 sales per quarter, roughly 2-3X of industry average. We’re expanding our company-owned store (and colocated service infra) network to 2,000 company-owned stores by March 2025,” he said.

(Disclaimer: Shradha Sharma, Founder and CEO of YourStory, is an independent director in Ola Electric.)

Clean mobility ecosystem player, Micelio, on Friday held its third Global Clean Mobility Summit in Bengaluru. At the event, it launched a report addressing India’s battery ecosystems and identifying unique challenges and laying out the paths to address these problems. 

The report, titled “Evolving Ecosystems: Unlocking the Potential of India’s Domestic Battery Value Chain”, was a collaboration between Micelio, nonprofit organisation RMI, and the entrepreneurial hub at IIMB, NSRCEL. 

India is currently seeing rising adoption of electric vehicles (EVs) with current penetration standing at 6.8% in FY23-FY24. Going forward, with the rollout of favorable government policies such as PM E-drive, new EV vehicle sales are expected to touch 30% by 2030, the report says. 

At the core of this rising transition to EVs are batteries. Innovation in battery technology is an important step and India is making strides towards developing this ecosystem with the help of several government initiatives such as Khanij Bidesh India Limited (KABIL) and Production Linked Incentive (PLI) scheme for Advanced Chemistry Cells (ACC) to promote domestic battery production by 2030. 

However, the ecosystem is not without challenges. India imports 100% of its lithium needs and 70% of its cobalt and nickel, primarily from China, which dominates 80% of the global lithium refining market. The report addresses this challenge and suggests that while India explores more lithium reserves, the Ministry of Mines can work towards forming stable partnerships with countries to source lithium and cobalt to mitigate supply chain risks. 

India needs over $10 billion in investment to develop needful infrastructure refining and gigafactory infrastructure for battery production. This can be addressed by leveraging public sector undertakings (PSUs). By leading investments, PSUs can lower barriers for private sector players to scale up operations, the report says. 

Quality issues in batteries are a key sticky point in today’s EV ecosystem. Imported battery materials, including raw materials, cells, and other elements are assembled into battery cells and/or packs. These often have quality issues, reducing their lifespan by about 30%. This inconsistency also increases maintenance costs for EVs, affecting consumer confidence in these vehicles. 

The report addresses this problem by suggesting that the Indian Bureau of Standards (BIS) and local battery manufacturers develop and implement a battery grading framework. The guidelines would define performance benchmarks and quality parameters specific to the Indian market. 

With the rising influx of EV batteries in the ecosystem, there comes an increasing need to promote a circular economy in the EV ecosystem. However, today, India’s recycling rates are below 5%. Rather than missing out on oppurtunities to reclaim valuable materials like lithium and cobalt from these batteries, the report suggests the development of a Battery Traceability System, a form of Battery Aadhaar. 

Under the system, each battery will have a unique identification number which enable real-time tracking for its entire life cycle, from production to disposal. 

To facilitate these problems and encourage collaboration among various stakeholders, RMI plans to form a battery consortium to bring together manufacturers government agencies, research and financial organisations to deploy solutions to help localise production, promote a circular economy, and improve resource efficiency.