Turno, the India-based commercial electric vehicle platform, will today announce it has raised $13.8 million of Series A funding just a year after is launch. The business has won a 20% market share since it began trading in five states of India in January 2022, and now has plans to expand rapidly.
Launched by founders Hemanth Aluru and Sudhindra Reddy, who met when working at car sharing business Zoomcar, Turno aims to make it far easier for small and medium sized enterprises in India to secure commercial electric vehicles (EVs). With these SMEs accounting for around 90% of the country’s logistics industry, the project has the potential to substantially accelerate adoption of commercial EVs in the country – driving significant sustainability benefits.
“We can see an inflexion point around EVs,” says Aluru of buyers’ willingness to switch away from vehicles that depend on a conventional internal combustion engine (ICE) for power. “But the key is to get the financing right, and to do that over the lifetime of the vehicle.”
The high upfront cost of all commercial vehicles means most purchasers need credit when buying new vehicles – particularly SMEs with leaner balance sheets. But in the EV market, that has proved problematic. Lenders want to lend against the value of the asset, rather than on the borrower’s credit rating, but they don’t yet have a clear view of how EVs depreciate over time – and they worry that EV batteries have short shelf lives, particularly compared to ICE-powered vehicles. The result is that buyers often have to put up substantial deposits and pay high rates of interest, making EVs prohibitively expensive.
Turno’s solution relies on an innovative technology solution that enables it to work much more competitively with SMEs. The company’s platform connects SMEs with EV manufacturers in the first place, provides credit to finance a new purchase, and guarantees the buyer a minimum resale value in the future.
That value proposition is powered by Turno’s understanding of the electric battery market. It has identified a significant resale market for EV batteries – while these may no longer be suitable for use in vehicles after, say, five years, they can be redeployed as stationary assets in locations such as data centres and infrastructure installations.
This is what enables Turno to lend with more confidence – funding is provided in conjunction with finance providers – and also to offer a guaranteed resale value. In addition, SMEs that buy a commercial EV on the platform agree to Turno receiving data on how the vehicle is used. Using analytics, Turno can then get a much clearer idea of the battery’s health, and thus its likely future value; it can even offer purchasers incentives to drive in such a way as to minimise usage.
Turno founders Hemanth Aluru and Sudhindra Reddy
Aluru believes this innovative model can drive far more rapid take-up of EVs by commercial customers, who are responsible for far greater mileages and carbon emissions than car drivers. By lending at cheaper rates and guaranteeing a resale value, the company estimates it can reduce the total cost of ownership of a commercial EV by 30% compared to other financing solutions.
“Today, 80 to 85% of India’s automotive fuel consumption is driven by commercial vehicles with internal combustion engines, but there is a strong desire to transition to a green economy and commercial EV adoption therefore holds significant promise,” says Aluru. “Turno was founded with the mission to convert these gasoline miles into electric miles, having a significant positive impact on the environment.”
SMEs appear enthusiastic, with Turno now picking up 20% of all commercial EV sales in India. The company is growing at a rate of 30% a month and earning revenues that translate to $20 million a year.
Investors have taken note. Today’s Series A round is led by global venture capital firms B Capital and Quona Capital, and has also attracted interest from new investors including Alteria Capital and InnoVen Capital, and existing investors Stellaris Venture Partners and Avaana Capital.
“Commercial EV sales are heavily dependent on the availability of attractive financing options and today the Indian market is plagued by lack of truly customer-centric options,” says Karan Mohla, General Partner at B Capital. “Turno has identified a key missing element in the ecosystem that solves the problem of financing as well as distribution and servicing.”
