Indian electric mobility startup Magenta Mobility has closed a $22 million Series A1 round, backed by $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 is delivers goods in seven cities across the country — specifically Bengaluru, Delhi, Mumbai, Mysuru, Hyderabad, Gurugram and Noida. Magenta aims to use its latest capital influsion 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 supply its fleet, such as Tata Motors, Mahindra, Piago, Omega Seiki and Euler, among others.
Magenta currently counts 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 even water and mattresses as commercial EV adoption has become widespread 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 he did say the startup has seen 5x growth every year. The startup has a team of 200 members that sit in its offices across four cities.
The investment from BP Ventures 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 collected 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 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 fleet charging hubs as well as hundreds of public charge 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 the 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 expansion 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 the demand for e-mobility among stakeholders.
“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 space as the market had yet to grow an electric mobility ecosystem.
The early move into the EV space helped Magenta Mobility gain some attention and attract seed funding from Indian government’s Hindustan Petroleum Corporation (HPCL) after getting noticed by the Prime Minister’s office in 2018, Lewis, founder and managing director at Magneta Mobility, recalled in an interview.
However, as the ecosystem has come into play with the addition of scores of new players joining the market, Magenta Mobility has moved beyond merely offering its 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.