Yulu eyes debt funding; to expand into new geographies

Bengaluru: Yulu is in talks to raise a ‘large’ debt capital, as the electric bike rental startup aims to bolster its presence in its existing markets, its chief executive officer Amit Gupta said, adding that the company will expand to another 10-12 cities this year. Yulu will use the fresh funds to grow its fleet size. “In places such as Delhi, Mumbai, and Bengaluru, we have the ability to grow 7-8x, so we have a lot of opportunity and supply and demand in our core markets,” Gupta told Mint in an interview.

The company also has plans to launch two models in collaboration with Bajaj Auto, its largest shareholder. Gupta did not specify the amount of debt that the company is raising. Last week, news website Entrackr reported that Yulu had raised 25 crore debt from Northern Arc Capital.

Launched in 2017, Amit Gupta along with R. K. Misra and Naveen Dachuri founded Yulu in an attempt to help escape traffic congestion and overcome last-mile mobility challenges in Indian cities.

Yulu operates in key markets such as Bengaluru, Mumbai, Navi Mumbai, Delhi, and Gurugram, and aims to expand to other cities such as Hyderabad and Pune that have a population of at least 10 million. “I think India, for the first time, has a domestic market advantage. .

. maybe Yulu is not into manufacturing, but I see a huge market in the country and with the push from the government and the policy side, I think I feel pretty excited about that opportunity,” Gupta said. The Bengaluru-based Yulu gained prominence through its partnerships with players in the delivery and e-commerce landscape.

It has partnered with firms such as Swiggy, , and Zepto. Food-delivery platforms and e-commerce firms are notorious for high cash-burn, and vehicle operators such as Yulu help them cut costs to some extent. Yulu estimates that gig workers employed by these platforms can save up to 30% of the cost compared with a fuel-based vehicle.

These bikes can cover 80-90 kilometres a day, Gupta said. Several experts in the e-commerce market have also alluded to the sentiment that EVs would be the way ahead for the gig economy to flourish, as this can greatly benefit workers by increasing their take-home wages by cutting down on fuel costs. Growing demand for EVs has attracted investor attention and encouraged them to bet on the sector proactively.

The optimism also comes from government-driven schemes that push for local manufacturing and provide subsidies for electric vehicles. “I think the outlook has changed dramatically,” Gupta said. He added that initially it was not a very lucrative space as people were not aware about the future of electric mobility and investors were sceptical, as this is also a very asset-heavy sector.

However, people are more confident about this segment now, as there has been a lot of conversation around sustainability and transitioning to EVs. “Now, there are dedicated funds, which are basically ready to deploy billions of dollars around the sustainability part. So climate change, or energy transition, you just name, we cut across all of those themes and we sit at the intersection of these three or four large themes,” Gupta said, adding that these factors are huge tailwinds for the company.

In the last two years, Indian EV companies received a total funding of $3. 2 billion, against $863. 7 million in the two years before that, according to data collected by Tracxn.

Yulu aims to go public in 2026. The company is currently working towards improving its revenue, and is confident about reaching its profitability targets by the first half of this year. As of September 2022, Yulu was valued at $180.

8 million, as per Tracxn. “This year, we are going to hit these important milestones. We’ll also have a reasonable amount of revenue scale for us to be setting the foundation for an IPO.

In our own internal milestone perspective, we will behave like a publicly-listed company in 2025, and at the right time, we will enter the market,” Gupta said. Last year, Yulu reported a revenue of $5. 8 million, compared to $4.

1 million a year earlier. Its losses widened to $12. 1 million versus $7.

5 million a year earlier, according to Tracxn data. Livemint tops charts as the fastest growing news website in the world to know more. Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away!.