Electric mobility startup Yulu Bikes plans to spend the money it has raised from private investors on research and development, to expand its fleet and add to its product lineup, chief financial officer Anuj Tewari said.
Yulu raised $9 million last week through debt financing from the US International Development Finance Cooperation through its new Emobility financing team. The startup had earlier raised $82 million from Canada's Magna and existing investors including Bajaj Auto.Tewari told CNBC-TV18 in an interview that Yulu plans to use the money for R&D and capital expenditure and to expand its fleet in six to seven cities.
Tewari said Yulu has 10,000 bikes on the streets in Bengaluru, Mumbai and Delhi.
Yulu deploys shareable, low-speed, electric two-wheelers to facilitate accessible, sustainable urban mobility in India.
Yulu Bikes, in collaboration with Bajaj Auto, is due to launch a third-generation electric two-wheeler platform by the end of 2022, the Economic Times has reported.
The mobility service provider plans to launch multiple variants of its next generation electric two-wheeler with focus on micro-mobility solutions for commercial operators in food delivery and last-mile connectivity, the report said.
Yulu Bikes caught on among gig workers during the pandemic when home deliveries of everything from daily essentials to restaurant orders rose as families were confined at home.
"We saw during the pandemic when the goods mobility caught an impetus that people were using more and more of our bikes. And it was not just because of the situation, it was because of the economics of deliveries. And if you were doing deliveries on the EV, it was 30-35 percent cheaper than the ICE (internal combustion engine)-based form factor,” Tewari told CNBC-TV18.
“We have now launched a product which is meant for delivery, goods delivery. Like goods delivery today, almost 60 percent to 70 percent of our fleet are getting used in the delivery segment. But in the long term, we will like to maintain a 50-50 mix."
Explaining the company's decision to take the debt route for raising funds, Tewari said: "Funding through the debt route is successive validation of our business models, our vision and mission by top institutions globally.... And this also gives us a great sense of responsibility."
Loss incurred on capacity creation
When asked about the Rs 50 crore loss incurred by Yulu in the last financial year and about the timeframe in which the company expects to turn earnings before interest, tax, depreciation and amortisation (EBITDA)-positive, Tewari said the loss had been incurred in the process of creating capacity.
“But if you see, we grew almost 100 percent from the last year while we managed to control our cost. Actually, what you see as losses is basically the capacity creation. This year, when we scale up, we will be a bit positive this financial year on a monthly, daily basis and during some time next year, we will be PAT-positive also", Tewari said. PAT is short for profit after tax.
Yulu plans to invest Rs 1,200 crore in Karnataka and signed a memorandum of understanding to install electric vehicle infrastructure.