Fuelled by a passion to do something different, Sanchek Pilane, a mechanical engineering student in his 20s, founded his startup Exa Mobility in 2018 with the long-term vision of “Mobility-as-a-Service” (MaaS).
Little did he know that two years of hard work in research and development was not enough to “convince” investors in the electric vehicle (EV) space.
Then, the Covid-19 outbreak and subsequent lockdowns came. An undeterred Pilane followed his dreams, pivoted his business model and is now cash-flow positive.
In the beginning…
A student of Jnana Prabodhini, Pilane did his mechanical engineering from the Pune Vidhyarthi Griha’s College of Engineering and Technology. Says Pilane, “I wanted to do something different. In my school days, I dreamt of becoming a scientist, but while pursuing my engineering degree I thought of entrepreneurship and decided to enter this exciting space.”
“I had developed a keen interest in sustainable energy. While we were in the third year of engineering, our college team participated in an electric vehicle competition. We had then made a running prototype of an electric bike. I was the vice-captain of the team and we had won that competition. Since ours was the first team to participate in such an event, there was no team to guide us. In another national-level competition by Mahindra, we came in the top 10. I realised that that EV is the future. That’s when I decided to do venture into the EV Space,” recalls Pilane.
Starting up
After finishing his engineering education in 2017, Pilane’s family wanted him to go abroad for higher education, gain experience and then start a business. However, Pilane felt that would be a waste of time. “Instead of investing a couple of years and spending lakhs of rupees for higher education abroad, I thought I will gain more experience with my startup in India. My expertise was in product development and I wanted to utilise it since my college competition days. My family too trusted me and supported me. Today I can say my decision has been proved right,” Pilane says.
A rough ride
Says Pilane, “Exa Mobility was started in June 2018. The first electric scooter prototype was prepared in March 2019. We wanted to develop a product which is useful for our business. Hence, we were designing our product for logistical commercial fleets and not for regular consumers.”
Building the team was the first challenge that Pilane faced. He says, “My college friend was my first employee, but after a few months he left to pursue his higher education. We faced a lot of problems during recruitment. Neither did we have a strong business background nor had we any IIT-tag. Convincing candidates and hiring them was tough. We hired our second employee in August 2019. During the first prototype phase, we were a team of four.”
Covid hits
Exa Mobility participated in the College of Engineering Pune (COEP) Startup Fest in February 2020. “The response from investors was good and the team was in the top 10. We expected to raise a funding of ₹30 lakh to ₹1 crore. However, investors felt that we needed to generate more traction and also develop the prototype further. They asked us to have at least 50 vehicles running on the road. We were disappointed, but determined to make it happen. However, after that, the Covid-19 outbreak happened and whatever investor interest we had generated was lost,” Pilane said.
“We were clueless about the pandemic and its after-effects. We didn’t anticipate the lockdown to go on for months. From April to August 2020, we kept on hiring candidates. Our second prototype with increased range and a more aerodynamic design was ready. However, by then, we had started to face a financial crunch. So, we started laying off employees till December 2020, after which, the team stabilised,” Pilane claims.
The pivot
Relying heavily on research and development of product and losing focus on the business part made Pilane learned his lessons the hard way. Trying to figure out a way to gather revenues, Pilane and his team started a rental service for EV bikes.
“We made an app called Exa Ride for shared mobility services to generate revenues for the company. We had the IT crowd as our target audience, but during the second wave we took another hit on this side. I was so disappointed that I was thinking of closing down the company at that time. Luckily through a vendor contact, Pilane got an order from an e-commerce company for seven EV vehicles for their logistics and delivery services. In this turn of fortune, Exa Mobility started receiving other orders and we had about 80 vehicles running on road on a rental basis in the month of May this year,” Pilane stated.
Mobility as a Service
Says Pilane: “We created the ‘Mobility as a Service’ platform to radically change the way people and goods move from one point to another. We aim to provide a next-gen urban commute system and our shared electric vehicles will become an integral part of your world. Our vision is system-level integration of sustainable mobility into the transportation system.”
“We are also filing multiple patents for the vehicle. We are building an entirely new product. We were recently selected by Software Technology Parks of India (STPI) under the Ministry of Electronics and Information Technology to be incubated at the ‘MOTION’ – a Centre of Entrepreneurship (CoE) in Autonomous, Connected, Electric, Shared (ACES) Mobility.
MOTION is a specialised state-of-the-art incubation facility and domain specific physical laboratories for start-ups working in the area of Autonomous Connected Electric Shared Mobility where the highest-standards and best-practices in terms of infrastructure, technology, leadership, mentoring, training, research and development, funding, networking for the given focus area is made available.
Business USP
Pilane and his team came up with an interesting business model. Exa Mobility rents out electric vehicles to its B2B customers but they own only 20 vehicles of the total fleet of 90. The rest are financed by “investors”. These investors can be any individual who is willing to fund the purchase of EVs and get a good return on investment.
“We do digital marketing to approach ‘investors’ for financing. We got our first investor in May 2021 who owns a mobile shop and got in touch with us through our advertisement. For example, for a vehicle worth ₹70,000, the investor is paid ₹2,700 per month for the first three years. Ownership of the vehicle is with the investor as collateral against his funds. With about 21 per cent compounding return on investment, the individual gets ₹1.24 lakh in three years and thereafter, ownership is transferred to Exa Mobility,” Pilane explains.
“We have managed to get 55 vehicles financed through this business model and it is working quite well for us. At present the vehicles purchased for the rental model are from different companies like Hero Electric, BATTRE (Delhi) and PureEV (Hyderabad), depending on their offerings for different customer segments. With this unique business proposition, we get Rs4,000 per month on rental models, which also includes maintenance and other charges of the financed vehicle. We are profitable from day 1,” Pilane claims.
“We were in talks with some colleges, but haven’t deployed any vehicles on those campuses yet. According to this proposal, colleges would give us parking space, charging infrastructure in their campus and their students or staff can use our vehicles for internal or external use. Bharati Vidyapeeth college students used our vehicles on an hourly basis for a charge of ₹250 per hour. In a way they were our first customers which we got through the Exa Ride app. But now, we are only catering to B2B customers on the basis of a monthly charge of ₹4,000 to Rs5,000.
Strong KYC is a must
Says Pilane, “In order to mitigate risks involved in the rental model of EVs, we have put in place a very strong Know Your Customer (KYC) process. In case of individuals, we charge ₹400 per day. We take the Aadhar number of the user which is then verified from a database. A selfie and photo of the user with vehicle is also taken. Recently we have started securing a deposit of ₹4,000 per vehicle. All our vehicles are insured and in case of accident, the insurance claim can be made. If any expenses over and above the approved insurance amount are incurred, it is recovered from the user.”
Expansion and future plans
When asked about his expansion and future plans, Pilane says he aims to have 1,000 vehicles on the road on a rental basis by March 2022. “In the logistics segment alone, we are targeting 1,000 vehicles. Pune itself has an immediate demand of 500 EVs for B2B segment. We want to explore the $220 billion industry in logistics by providing end-to-end logistics service. Recently, we started operations in Navi Mumbai and plan to expand in Mumbai, Thane, Nashik and Goa in the next one year. We haven’t yet tapped the IT industry and student customer segment.”
“We would like to associate with the Pune Metro for exploring the first mile and last mile connectivity. This would be after six more months as it would be an operations heavy model with requirement of sizeable human resources. About two years later, we will launch our own product and we would need around ₹50 to ₹100 crore to setup a factory for production of our vehicles. In the long term we wish to enter the autonomous vehicles space in 2030. There is lot of scope in the trucking industry in this particular space,” states Pilane.
What to do when…
In April 2021, when the second lockdown happened, an electric scooter was “almost” stolen. Just before the lockdown, a customer exhausted the battery. So he decided to park it at his relative’s shop.
“We told him that we will take it from there as soon as possible and asked him to make sure that vehicle is put to charge. But he forgot to charge it and the lockdown was announced next day so even we couldn’t go near the vehicle for a few days. Just to make sure vehicle is safe, we monitored it via GPS. Once our team went there, the vehicle was not there,” says PIlane.
“We enquired and people said that they never saw any electric scooter there. We were clear that something was fishy. We coordinated with the local police station. We informed everyone that police are coming and if anyone knows about our vehicle, now is the time to talk. So, within 15 minutes , one person said that he hid the vehicle so that it won’t be stolen by anyone and showed us where the bike was. We recovered our bike. Thereafter, we mostly prefer monthly subscription plans with strict KYC of the customer. Also, we are doing regular visits and GPS tracking of the vehicles,” Pilane claims.
Money talks
“I run a food joint business and also work as a Facility Manager in an IT company based in Pune. The biggest reason for me to invest here was a massive 24 per cent return. The fact that they provide a fixed monthly payment made me curious about the programme. So far I have financed 5 e-scooters and that makes my fixed income per month ₹13,500 which is quite exceptional. I am going to be the owner of the e-scooters that I have financed. So, this makes my investment backed back a strong asset,” says Vernon Cardozo, an investor,
“Being a retired person, my first choice was always a fixed deposits in the Bank. They are safe and most trustworthy. I wanted few of my savings to be invested somewhere else for higher returns as FD is nowadays giving only 6% returns. I invested in Exa Mobility’s Vehicle Financing Programme as the returns were guaranteed with monthly instalments and I always admire youngsters doing something futuristic and innovative,” said Anil Bibikar, a retired professor
“I have been a regular customer of Exa Ride’s daily rental plan. I think it is a good alternative to the round trip of Ola or Uber Cab and especially when you want to visit multiple places in the city,” says Deepa Bargi, a working professional.
The competition: eleRide renting EVs in Pune
eleRide has launched monthly subscription plans for electric two-wheelers in Pune. Users can access the smart charging centers facility along with free insurance and maintenance and a detachable battery chargeable at home. Using these electric two-wheelers, any user can travel up to 100 km on a single charge. This service is available for both B2C and B2B customers.
The company has introduced two new subscription plans ranging between ₹3,499 to ₹4,499 under eleLite and elePrime with the introduction of five charging stations and three eleRide EV service centres across Pune at locations like Shivajinagar, Viman nagar, Vishrantwadi, Wakad and Pashan (Bengaluru-Mumbai Highway). Punekars can choose their preferred two-wheelers along with the subscription term through the eleRide website and get it delivered to their doorstep in two hours.
“We believe that two-wheelers will lead India’s transition to e-mobility. We will accelerate this shift by providing smarter ownership options to customers. We aim to expand the eco-friendly two-wheeler subscription services across the country starting with cities like Mumbai, Hyderabad and Bengaluru,” said Niraj Kumar Mishra, Founder and CEO eleRide.
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