Indian EV startup River gets $11 million from Chris Sacca’s Lowercarbon Capital, Toyota Ventures

The round also saw participation from Toyota’s early-stage venture capital arm, Toyota Ventures.

“Three of four vehicles sold in India are two-wheelers, but what’s available today have loud, dirty, gas-burning engines from the last century,” said Sacca, who has also invested in Twitter, Uber and Instagram. “River’s electric two-wheelers are the new go-to for Indian riders, because they’re faster, tougher and just plain cooler than anything else on the market.”

With this funding, River plans to expand its team, invest in R&D, set up a manufacturing facility and get its first product ready for sale by early next year, its cofounder, Aravind Mani, told ET.

The company is also in talks to raise another $100 million, Mani said. The next funding round will take place before the company starts selling its vehicles, he said.

Mani had founded River along with Vipin George in 2020 to fill a gap in the market.

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“There is a large section of the Indian market that buys two-wheelers also to inherently carry load, and this is also the reason why scooters are growing at a much larger pace compared to motorcycles…,” said Mani.

River has been building an electric scooter that replicates the “pick-up truck culture” of the West, which means that the vehicle will have significant cargo space.

“How do we create a product for the young middle-class Indian who is a solo entrepreneur, someone who is a multi-tasker?” said Mani.

River has been operating in stealth for some time now and has an in-house design team that created a vehicle from scratch. “No one enters a delivery segment with the thinking that I will do this for life,” he said. “They will not buy a product thinking that they will only use it for delivery, so we are kind of trying to see how we can create a product which can be used for multiple things.”

For now, the company is keeping the vehicle, its price and specs under wraps.

“People only see moped as a utility vehicle. But there is no style there and no one young would aspire to buy it,” said Mani. “So we are trying to combine the utility and the individuality quotient which is capable of creating an all-electric vehicle and at the same time it is stylish.”

No big factories
“Right now we are at the product development stage, where we are planning to put 30-50 vehicles on the road by September, which will go into homologation and will be tested extensively, and in the next year you have to start production,” said Mani.

The company wants to set up small production facilities with capacities to produce about 10,000 vehicles a month. The first facility is coming up in Hoskote, near Bengaluru. Mani said this approach helps the company operate efficiently.

“We are reimagining the system in such a way that we do not need such a big facility to do any of the manufacturing,” said Mani. “We can do it in very simple terms by controlling the quality. That is why here your suppliers are very important. Your quality, efficiency, speed all depends on how efficient and established your suppliers are.”

River will outsource most of the manufacturing to suppliers, which Mani claims are among the top component makers in the country. River’s quality control team will visit suppliers’ facilities to ensure quality is maintained. The company will assemble all the components together in the “micro-factories”.

“We can scale it up as demand picks up and you can have multiple of these across the country,” said Mani. “And it has very less fixed cost, and less manpower, hence very easy to break even.”

By the time the company raises its next funding, Mani said they would have solved several problems, including testing, homologation and a production facility.

“We want to raise a much bigger round, which will help us take the product to market, scale up distribution,” said Mani.

River plans to operate in a distributor model with dedicated service points.

“Two-wheeled vehicles are the foundation of mobility in India and a huge worldwide market principally because they’re so easy to navigate in congested urban environments,” said Jim Adler, founding managing director of Toyota Ventures.