Indian electric mobility startup Magenta Mobility has closed a $22 million Series A1 round, comprising $11 million 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-headquartered startup has a fleet of 800 three-wheeled electric cargo trucks with which it delivers goods in seven cities across the country: Bengaluru, Delhi, Mumbai, Mysuru, Hyderabad, Gurugram and Noida. Magenta aims to use the funding to expand into eight new cities in the next two years and grow its fleet to 4,000 three- and four-wheeled EVs in the next year. The company partners with local and global OEMs to build its fleet including Tata Motors, Mahindra, Piago, Omega Seiki and Euler.
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, grains and water and mattresses as commercial EV adoption gains steam in the country. Magenta says it has conducted nearly 70 million deliveries covering 6.4 million kilometers, of which 60% have come from e-commerce.
Maxson Lewis, Magenta’s founder and managing director, wouldn’t share details about the company’s revenues, but said the startup has seen 5x growth every year. The firm has a team of 200 members in offices across four cities.
The investment from BP Ventures is more than just a financial partnership. BP brings access to its network of strategic partners, as well as a wealth of knowledge collected from its 14 previous mobility investments and $27 million invested in India to date. Magenta is the venture firm’s second investment in the country, following EV ride-hailing startup BluSmart last year.
The partnership also gives Magenta access to Jio-BP, the joint venture between BP and India’s Reliance Industries, as the exclusive EV charging partner for the startup’s fleet. Jio-BP has a number of large EV charging hubs as well as hundreds of public charging points in various cities and major highways across the country. The startup will also be able to leverage BP Ventures’ network to grow its strategic partnerships.
First-mover advantage
India has become a fast-growing EV market, with 2.64 million EVs registered as of March 15, per government data produced in the parliament last week. Although the market is largely dominated by electric two-wheelers, the country has over 1.39 million electric three-wheelers. The ongoing growth of e-commerce in the country and New Delhi’s aim to reduce India’s carbon footprint by 33%–35% by 2030 below 2005 levels are expected to boost demand for e-mobility.
“The pace of growth for electric vehicles in India, especially in ‘last mile’ delivery, is extraordinary and is playing a major role in decarbonizing cities. We’re very proud to make BP’s first venture-led entry into India’s last-mile delivery market and our second in the Indian mobility sector,” said Gareth Burns, vice president of BP Ventures, in a prepared statement.
Lewis founded Magenta Mobility in February 2018 after spending five years in the automobile industry, 15 years in the electricity sector, and years at multinational firms including Bosch and Accenture. The startup initially kicked off its journey to solve the problem of EV charging, as the market lacked an electric mobility ecosystem.
The early move into the space helped Magenta Mobility gain some attention and attract seed funding from Indian government’s Hindustan Petroleum Corporation (HPCL) after it was noticed by the Prime Minister’s office in 2018, Lewis said.
However, as the ecosystem has burgeoned with the addition of scores of new players joining the market, Magenta Mobility has moved beyond merely offering charging infrastructure and started handling last-mile mobility using an all-EV fleet.
“We were always aware that we wanted to focus on the last-mile mobility, wherein we built up this charging infrastructure as a captive service. Effectively, our charging infrastructure is getting utilized by our last-mile mobility,” Lewis said.
In its plan to build an electric last-mile 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.
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Jagmeet Singh