Indian e-mobility startup Magenta Mobility has closed a $22m Series A1 funding round, backed by $11m each from Morgan Stanley India Infrastructure and BP Ventures. Magenta will use the all-equity investment to boost its existing logistics and last-mile delivery fleet operations.
The Navi Mumbai-based startup has a fleet of 800 three-wheel electric cargo trucks with which it delivers goods to seven cities across the country, specifically Bengaluru, Delhi, Mumbai, Mysuru, Hyderabad, Gurugram and Noida. Magenta aims to use its latest capital injection to expand into eight new cities over the next two years and grow its fleet to 4,000 three- and four-wheel electric vehicles next year. The company partners with local and global OEMs to supply its fleet, such as Tata Motors, Mahindra, Piago, Omega Seiki and Euler, among others.
Magenta currently has about 35 customers, including e-commerce and grocery delivery companies such as Flipkart, BigBasket, Udaan, and Amazon. The startup has also started handling deliveries of food, grain, and even water and mattresses as the commercial adoption of electric vehicles grows in popularity in the country. Magenta says it has made nearly 70 million deliveries covering 6.4 million kilometers, 60% of which are from e-commerce.
Maxson Lewis, Founder and CEO of Magenta, did not share details on the company’s earnings, but said the startup has grown 5x every year. The firm has a team of 200 members who sit in its offices in four cities.
The BP Ventures investment is more than just a financial partnership. BP brings to the table access to its network of strategic partners, as well as a wealth of knowledge garnered from its 14 previous mobility investments and $27 million invested in India to date. Magenta Mobility is BP Ventures’ second investment in the country after investing in start-up BluSmart last year.
The partnership also gives Magenta access to Jio-BP, the joint venture between BP and Reliance Industries in India, as the exclusive electric vehicle charging partner for the startup’s fleet. Jio-BP has a number of large electric vehicle fleet charging centers as well as hundreds of public charging stations in various cities and on major highways across the country. The startup will also be able to take advantage of the BP Ventures network to develop its strategic partnerships.
First-mover advantage
India has become a fast-growing electric vehicle market, with 2.64 million electric vehicles registered as of March 15, according to the government data produced in parliament last week. Although the market is largely dominated by electric two-wheelers, the country has more than 1.39 million electric three-wheelers. The continued expansion of e-commerce in the country and New Delhi’s goal is to reduce India’s carbon footprint 33-35% by 2030 below 2005 levels is expected to drive demand for e-mobility among stakeholders.
“The rate of growth of electric vehicles in India, especially in ‘last mile’ delivery, is extraordinary and playing a major role in decarbonizing cities. We are very proud to be making BP’s first entry into the Indian last mile delivery market and our second into the Indian mobility sector,” said Gareth Burns, Vice Chairman of BP Ventures, in a prepared statement.
Lewis founded magenta mobility in February 2018 after spending five years in the automotive industry, 15 years in the electrical sector and years in multinational companies such as Bosch and Accenture. The startup initially embarked on its journey to solve the problem of EV charging space, as the market had yet to develop an e-mobility ecosystem.
The early move into the EV space helped Magenta Mobility gain attention and attract seed funding from the Government of India’s Hindustan Petroleum Corporation (HPCL) after it was noticed by the Prime Minister’s Office in 2018, Lewis, founder and CEO of Magneta Mobility, recalled in an interview.
However, as the ecosystem came into play with the addition of dozens of new players to the market, Magenta Mobility went beyond simply offering its charging infrastructure and began to manage last mile mobility. using an all-EV fleet.
“We have always been aware that we wanted to focus on last mile mobility, in which we have built this charging infrastructure as a captive service. This is because our charging infrastructure is used by our last mile mobility,” Lewis said.
In its plan to build a last-mile electric delivery ecosystem, Magenta has raised a total of $33.7 million, with LetsVenture, JITO Angel Network and Indian-American philanthropist Dr. Kiran Patel among its investors.