Swap story: Inside Yulu’s electric ride with Canada’s Magna

The Covid pandemic may have paralysed mobility as a business for a good 18 months. Yulu co-founder Amit Gupta, however, had been fending off tough questions from his team and the wider venture capital ecosystem way before that.

Yulu started out in 2017 as a clean energy, short-commute mobility startup. Focused on office commuters, it offered customers e-bikes for their last-mile mobility needs in cities. At the time, this bet on clean mobility, rather than going the diesel or petrol route, was seen as contrarian.

Meanwhile, newer rivals Vogo and Bounce raised hundreds of thousands of dollars in venture funding between 2018 and 2019 from deep-pocketed investors, including Sequoia Capital, B Capital, and Lightrock. With enough funding in the bag, they went head-to-head for consumer walletshare by burning capital at the altar of scale.

As Vogo and Bounce forged ahead, some Yulu employees grew sceptical of the company’s thesis. Instead, they pushed for growth on the only road that was being rewarded by the market—internal combustion engine (ICE) vehicles that were dockless.

“Every day we were questioned in the town hall. ‘Look at this company doing tens of thousands of trips, while we are sitting on a baby number with a baby product … against a market-tested product like Honda Activa or TVS Scooty.’ But we (founders) responded saying, ‘No, we will not do petrol.’ That was not an easy decision,” recalls Gupta.

Despite the pressure, Yulu stuck to its strategy. And in 2019, it onboarded a strategic investor, Bajaj to further its plans of building a new EV form factor designed for short commutes. All told, the startup had raised $15 million as of March 2020.