Yamaha Motor launches River’s ambitious electric SUV two-wheeler in India


Indian startup River, which makes electric two-wheelers, has raised $40 million in a funding round led by Japan’s Yamaha Motor. Because the nearly three-year-old startup is looking to increase R&D spend and expand the market presence of its first electric ‘SUV’ two-wheeler in India.

The all-equity Series B round also saw participation from the startup’s existing investors, including Al Futtaim Automotive, LowerCarbon Capital, Toyota Ventures, Trux VC and Maniv Mobility. With the latest funding, the startup has raised a total of $68 million across four rounds, including the last round of $15 million announced in June.

Since its inception in March 2021, River has focused on the development and production of electric two-wheelers for Indian customers, an emerging and booming country in the country looking to replace diesel and gas-powered vehicles with EVs. It is a growing market. The biggest market opportunity in the South Asian nation – and the most competitive – is the two-wheeler market. According to government data, about 50% of the total EVs sold in the country are two-wheelers, of which more than 1.7 million are on the roads today.

Startup believes it can stand out and build market share The Indy, a $1,700 two-wheel scooter that’s bigger than its competitors. The Indy, which Rivers describes as “the SUV of scooters,” has a 14-inch wheelbase and storage space enough to hold two helmets and cargo weighing 33 pounds. Electric two-wheelers from the startup’s rivals – which include SoftBank-led Ola Electric and Tiger Global-backed Ather Energy – have a 12-inch wheel size and storage for a single helmet.

This utility-lifestyle focused product was created over months of R&D at a dedicated facility in Bengaluru. The company has delivered around 200 units since it began sales from its first retail store in the southern city in October.

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River’s first store in Bengaluru Image Credit: River

However, its ambitions are much bigger. The scooters are manufactured in a 120,000 square foot factory on the outskirts of Bengaluru, with an annual production capacity of 100,000 units (9,000 units per month). River says it plans to increase sales to 300 scooters per month in March and 3,000 units per month by the end of 2024.

“By the time we become a five-year-old company in March 2026, we want to be in 100 cities and scale up to sell about 9,000 vehicles per month, which is a turnover of about $200 million,” Arvind Mani, co-founder and CEO of -River’s founder and CEO said in an interview.

To achieve its goals, the startup plans to set up a distributor network that will eventually handle 90% of its sales.

Mani told TechCrunch that the startup has tied up with a few dealers and is initially looking for distributors in 10 cities, including Ahmedabad, Chennai, Hyderabad, Mumbai, and Kochi.

“We are in discussions with dealers for expansion,” he said. “We will also create more company-owned stores based on strategic locations.”

Mani co-founded River with Vipin George (Chief Product Officer), who previously worked as group chief designer at Honda in India. The pair has invested over $25 million in R&D and manufacturing in the first two and a half years and are now looking to expand River’s distribution, manufacturing and service network across the country as well as strengthen its R&D and blueprint. Working towards preparation. As for its next product, which Mani said will come after the startup reaches around 30 cities by March 2025 and 100 cities by March 2026.

“We have some products in mind. But till now we don’t know which one we will give priority and launch first. However, I can tell you that whatever product we make will be in this particular scope of utility,” Mani said.

After raising the first two rounds of funding from financial investors, Mani said Rivers has started to look towards strategic investments. The first such investment came last year from Dubai’s Al Futtaim Group, which is not only a large Middle Eastern conglomerate but also an exclusive Toyota distributor in the UAE representing about 29 brands across 14 countries.

The relationship could provide River access to a global distribution network after establishing its presence in India. A similar case can happen with Yamaha motor also.

“With Yamaha coming on board, there is also a strategic sense to possibly collaborate on product lines, but we don’t have any definitive agreements yet, or we certainly don’t have agreements on what that collaboration will look like . So, at this point in time, it is a pure financial investment with the potential to do more collaboration,” the co-founder said.

That said, River, which has 450 employees, 250 of them in R&D, wants to use the partnership with Yamaha Motor to leverage its design and technology capability. It appears that Yamaha has been sold on the company’s R&D efforts.

“We are impressed by the progress River has achieved in such a short time, especially with the strong focus on design and technology. We are excited by Arvind and Vipin’s strong belief in River and how Yamaha can support the company to achieve this,” Hajime “Jim” Aota, chief general manager of the New Business Development Center at Yamaha Motor Company, said in a statement.

Mani did not disclose the startup’s valuation, though he noted a “significant increase in valuation, a multiple of 10” since its seed round in 2021. He also said that with the fresh funding, the startup has enough capital to last for two years. ,

The startup is projected to reach gross margin profitability with 2,000 monthly units in 8 to 10 months. According to the co-founder, bottom-line profitability will take a little longer.

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