B Capital, Quona back India EV financing player Turno

Venture debt providers Alteria Capital and InnoVen Capital came in as new investors while there were re-ups from Stellaris Venture Partners and Avaana Capital. Stellaris led a USD 3.1m seed round for the company in June 2022 with support from Avaana.

The proceeds will go towards a battery technology platform that repurposes EV batteries into large-scale second-life energy storage systems, according to an Economic Times story cited in a Turno LinkedIn post. This is intended to prolong the useable life of batteries and reduce EV ownership costs.

Turno was founded in early 2022 by Hemanth Aluru and Sudhindra Reddy, who both previously worked for VC-backed rental platform Zoomcar. The company already claims a 20% share of the commercial EV market and operates in five states, including Karnataka, Telangana, Tamil Nadu, Delhi National Capital Region, and Maharashtra.

Turno partners with original equipment manufacturers (OEMs) and connects them with the SMEs that form India’s logistics backbone. One of the challenges SMEs face when making these purchases is financing; loans are traditionally made against the value of an asset, but most lenders are unsure of how EVs depreciate in value over time.

The Turno solution is to finance purchases and guarantee a minimum resale value based on its understanding of the EV market – specifically the resale value of batteries when put to other uses, such as in data centres. This enables it to charge lower interest rates and require smaller deposits than other financiers.

The company’s website lists four three-wheeler EVs made by Piaggio, Mahindra Electric, Etrio, and Omega Seiki Mobility (OSM), respectively. Average monthly payments, based on a 36-month tenure range from INR 11,000 (USD 133) to INR 13,600.

“Turno has identified a key missing element in the ecosystem that solves the problem of financing as well as distribution and servicing,” said Karan Mohla, a general partner at B Capital and head of early-stage investments in India and Southeast Asia, told The Economic Times.

EV sales in India reached 520,000 units in the 12 months ended March 2022, a more than twofold increase on the previous year, according to Avendus Capital, although EV penetration was still only 2.7%. Two-wheelers accounted for 322,000 in sales. In the three-wheeler cargo EV segment, sales increased from 800 to 6,400 units, with EV penetration jumping from 3.9% to 22.3%.

Italy’s Piaggio, which is best known for the Vespa brand, and Mahindra Electric are the large incumbent manufacturers across two-wheelers and three-wheelers. They are being challenged by upstarts like Euler, OSM, Altigreen, and Etrio.

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• Topics
• South Asia
• Early-stage
• Financials
• Cleantech
• India
• Electric Vehicles
• B Capital
• Quona Capital
• Innoven Capital
• Alteria Capital
• Stellaris Venture Partners