EV start-up River Mobility raises $120 mn; 40% of funds to go into R&D says CEO Aravind Mani

Electric two-wheeler maker River Mobility has raised $120 million in a Series C funding round comprising equity and venture debt, in one of the largest private growth-stage investments in India's electric two-wheeler sector. The oversubscribed round was led by Elev8 Venture Partners and Claypond Capital, with participation from Singularity AMC, Anicut Capital, 360 ONE Asset, JIIF and HDFC AMC, alongside existing investors including Yamaha Motor Corporation, Al Futtaim Group, Mitsui & Co., Alteria Capital, Innoven Capital and Stride Ventures.

The fresh capital will be used to expand production capacity at River's existing manufacturing facility, set up a new greenfield plant, develop new products in the utility lifestyle segment and improve gross margins and EBITDA profitability.

"This funding marks an important milestone in River's journey. The confidence shown by both our existing and new investors reinforces our belief that there is tremendous opportunity to build India's first utility and design-based mobility brand," said Aravind Mani, Co-founder and CEO of River Mobility. "This capital gives us the ability to accelerate our product roadmap, expand our manufacturing footprint and presence across the country."

The funding also marks River's first significant backing from Indian institutional investors, complementing its existing global investor base that includes Yamaha Motor, Toyota Ventures, Lowercarbon Capital and Marubeni Ventures.

The company, which launched its flagship electric scooter Indie in 2023, has positioned itself around the utility-first segment rather than competing primarily on price. River currently operates more than 75 stores across India and plans to expand its retail footprint to over 350 outlets by March 2028, adding nearly 10 stores every month.

Explaining the rationale behind the fundraising, Mani, while speaking with Business Today said that investors were backing a business that had already demonstrated product-market fit rather than just a growth story.

"We've spent the last few years building the fundamentals of the business rather than optimising for short-term growth," he said.

"In July alone, we retailed close to 6,500 vehicles, giving us around 3% of India's electric two-wheeler market. This round reflects confidence in our execution as much as our vision."

Mani said about 40% of the capital will be deployed towards R&D and product engineering, while the remaining funds will support manufacturing expansion, retail growth and after-sales infrastructure. The company is also preparing to launch its next electric scooter in 2027.

The objective is to create capabilities that will support River Mobility over the long term rather than optimise for the next few quarters."

The company is betting on the growing adoption of electric scooters in India, where one in every five scooters sold is now electric. However, Mani believes the market can support multiple successful players with differentiated offerings despite increasing competition from incumbents such as Ola Electric, TVS Motor, Bajaj Auto and Ather Energy.

"We've never approached the market intending to be the lowest-priced option," he said. "The fact that we've grown to around 3% market share while staying true to our utility-first philosophy gives us confidence that differentiation, rather than pricing alone, is the right way to build a durable business."

As River Mobility expands nationally, concerns around maintaining healthy after-sale services persists, to which Mani said it will continue investing in service infrastructure alongside retail expansion to strengthen customer ownership experience, even if it weighs on near-term profitability. "A satisfied customer drives repeat business, stronger word-of-mouth and a healthier retail ecosystem," Mani added.