Every now and then, Shreyas Shibulal heads out to the Kari Motor Speedway racing circuit in Coimbatore for a spin in a car that he built from scratch using a Westfield 2000 kit. Shibulal, 27, built the car when he was in his freshman year at Haverford College in Philadelphia, underscoring his passion and aptitude for automobiles.
After Haverford, from where he graduated in computer science, Shibulal went on to complete his masters in embedded systems from the University of Pennsylvania. But, unlike his father, Infosys co-founder and former CEO SD Shibulal, Shreyas Shibulal decided that his destiny lay in the world of automobiles, specifically electric vehicles (EV).
"I always wanted to do something in the automobile space. Hence the idea of a fund that would work with startups in the EV space seemed like a natural fit, and the social impact was appealing too," he said in a conversation with TechCircle in Bengaluru. He moved back home in 2016 after finishing his higher education.
In January this year, Shibulal launched Micelio, a platform to foster the EV ecosystem in India. The platform includes a $18 million fund, dubbed Micelio Fund, that will make seed stage investments in startups working on EV component technologies such as batteries, charging infrastructure and even the EV itself. It will also look at deep-tech related areas such as autonomous solutions. The fund will invest anywhere between $100,000 and $1 million in each startup.
For now, the Micelio Fund will be backed by Shibulal’s own money -- he owns a 0.66% stake in Infosys which is worth $280 million, which he inherited in his capacity as a family member of the Infosys founders.
Micelio isn’t the only venture with which the younger Shibulal is involved. He’s also founded and runs a B2B logistics firm called Lightning Logistics to gain first-hand experience in the EV sector. The company started operations early this year and supplies around 1,000 electric scooters and delivery executives across three large cities in South India to ecommerce firms and has completed a cumulative mileage of over 200,000 kilometers.
"No one really has data on how these bikes will operate when used the way we do. Each scooter does around 50 kilometers a day. The unit economics are positive but we are focussed on the data right now, for instance, how is the operational and cost efficiency at scale for EVs in the fleet, who are going to be early adopters," he said.
The timing for Micelio Fund seems perfect given the government's recent push and incentives for the sector. Last week also saw two major EV launches. Two-wheeler maker Ultraviolette, which is backed by the TVS Group, launched an electric sports bike made and designed completely in India for around Rs 3 lakh. That’s roughly the same price at which similar performing internal combustion engine motorcycles sell in the market. The last week also saw Nasdaq-listed EV major Tesla launch its Cybertruck at upwards of $40,000 in the US, which racked up 200,000 bookings in five days.
Micelio has already got more than 130 applications so far including from a company that works in the EV aircraft space. It has narrowed down to four startups for investments and is currently undertaking due diligence. The investments are expected to close by the end of this financial year.
While Shibulal said he is open to investing in EV makers, he is also cognizant of the reality that those will come up against some of the biggest automobile players. All major automakers are currently investing heavily in EV technology. "Yes, the capital requirement in the end-to-end game is much higher now but it depends on the stage and we can still make it count at the seed stage especially as co-investors. In fact, many of our funding discussions that are currently underway are along with co-investors," he said.
As far as the components ecosystem is concerned, the majority of the market is currently served by imports from China. Shibulal thinks that as sales in the country scale, there will be enough scope for creating a domestic component ecosystem for small companies to build and innovate for EVs.
"The new regulations provide incentives for EVs that have indigenised most parts. The battery management system is one area that has low entry barriers and is essentially a software play. Indian firms have a chance to do something and there are a lot of players in the space. But everything is kind of a mix of software and hardware play and eventually, we need to get into the hardware play to create a robust industry in India," he said.
He believes that the kind of support the automakers have given to startups such as Ather Energy and Ultraviolette is an indication that there is the potential for good returns for investors in the ecosystem. However, policies will play a big role in the speed of EV adoption as well as the success of such startups, he added. "It is all about patient capital and we understand that. We don't have an exit timeline but for legal purposes, it is a 10-year fund," he said.
To support such startups, Micelio is also setting up what it calls the Micelio Studio, which is a hardware and product development facility to support startups. The facility, which will be equipped and ready early next month, will enable startups to design and prototype new products.
"The upfront capital cost of such equipment is prohibitive for startups," he said. Micelio is talking to around 25-30 startups to see what are the kind of equipment they need at the facility. The facility would be accessible not to Micelio's portfolio companies but for any startup and will be available on a pay-per-use model.