Bajaj Auto-powered electric mobility company Yulu eyes global ride

It plans to pedal overseas with a Bajaj product and accelerate into India's e-commerce space with a high-speed two-wheeler

Bajaj Auto-backed, India’s largest shared electric vehicle (EV) mobility company Yulu is now eyeing foreign shores with its EV two-wheeler ecosystem around 2025-26, powered by a new product from the Bajaj stable, besides expanding into more markets and product categories in India.

The company is also targeting to become profitable within the financial year 2024-25.

Yulu is exploring two new products – one in partnership with Bajaj Auto, and another with an EV start-up. “The Bajaj Auto model may take a bit longer, given their focus on perfection and several research and development programmes they have. For now, we are most likely to go live with the other original equipment manufacturer (OEM) and launch the product within this calendar year.”

The idea is to go overseas using the Bajaj product and use the other model developed by the EV start-up for opening up new categories (like e-commerce) in India. The Bajaj product would also be used for the Indian markets before taking it overseas.

“Our market study shows that the level of lack of driver, vehicle, and licence ownership we see in India is not the same in South-East Asia. When we launch, it will be a mid-speed product,” said Amit Gupta, co-founder and chief executive officer (CEO) of Yulu, adding that a low-speed bike is not a good product-market fit as a service use case in Asian countries. Countries outside India need high-speed products due to their lower population densities and more efficient roads.

Yulu, however, will not put up its own team overseas – it would not be operated under a company-owned-company-operated (Co-Co) model but through a local partner. Bajaj Auto already has partners in over 70 countries. Yulu will supply the bikes, product stack (including software), provide the charging infrastructure, and the standard operating procedures.

At the same time, it is also looking at expanding into new categories and new cities in India.

At the moment, there are around 35,000 Yulu bikes on Indian roads. In February, Bajaj Auto and Magna International together invested around $19 million in Yulu, and since then, the company has grown by almost 50 per cent in terms of revenue. “We have been doing well. Our growth rate is almost 10-15 per cent month-on-month,” said Amit Gupta, co-founder and CEO of Yulu.

It operates in India with two models – company-owned-company-operated and franchise-owned-franchise-operated (Fo-Fo). Having entered the Hyderabad market recently, Yulu now has a Co-Co presence in four major cities including Delhi NCR, Mumbai, and Bangalore. Under the Fo-Fo model, Yulu has added three new cities this year.

Gupta told Business Standard that they have been working on launching a mid-speed (45 kmph) product for India and using that to unlock new segments within hyperlocal delivery, primarily from Amazon and Flipkart. “Typically, the e-commerce riders would carry 20-30 packs in one go, and our products were not designed to carry more than 25 kg weight. With this new product, we can now go up to 60-70 kg, and that would make it far more efficient in terms of delivery,” Gupta said.

Yulu’s low-speed product (which does not require the rider to have a licence) is doing well in the quick-commerce and food delivery segments. Here the average distance of orders is around 3-4 km. “Many delivery partners are ones who are moving from small towns and villages, and they don’t have a vehicle of their own. They also don’t have the money to buy a vehicle, and many don’t even have a driving licence. So we become their preferred partner,” Gupta explained.

He adds that players like Zepto, who are doing a lot of rural onboarding, often take Yulu representatives along with them to their camps. “In a lot of these onboarding programmes, Yulu collaborates with the rider hiring teams, which also makes their acquisition of delivery partners easier,” Gupta claimed.

Because of operating in the low-speed category, Yulu is not present in every part of the city’s pincodes. In Mumbai, for example, they are present in 30-35 per cent of the addressable market, and in Bangalore, it caters to around 55-60 per cent of the addressable market. “Wherever we are present, we have a penetration in the range of 25-50 per cent. Therefore, the blended number would work out around 25 per cent because there are areas where we don’t have a presence. Hence, there is potential to take the penetration up to 50 per cent overall,” Gupta said.

As such, Yulu has two business models – Yulu Miracle where people pick and drop from one zone to another and pay on a per minute basis. The typical time period here is 20-25 minutes, and Yulu charges Rs 2.5 per minute. The other business model is for last-mile delivery, usually preferred by gig workers who can pay on a daily or a weekly basis. Yulu has different packs starting from 400 km to 1000 km, and the cheapest plan starts from Rs 160 per day and can go up to Rs 225 per day, which also includes battery swapping.

The company is also looking to ensure it has enough supplies to support its growth plans. It is now close to making 5000-5500 units per month (through their partners), and by the end of this financial year, they would have a capacity to produce 75000-80000 units annually.

Yulu has raised over $123 million in equity capital from investors including Bajaj Auto, Magna International, Blume Ventures, 3one4 Capital, Wavemaker, Incubate Fund, Rocketship.vc, and other institutional and angel investors. Yulu has also secured $12 million in debt financing from the US International Development Finance Corporation (DFC) and Northern Arc.

It is now targeting profitability within 2024-25, Gupta said.

He added: “Fundraisers also should happen this financial year for sure. And the good part is not only equity but also debt. We are able to basically generate enough and more contribution margin. Our marketing cost is very low. So what we have to spend today is actually buying a bike and when it is a real asset that is coming from a reputed brand like Bajaj. I think that terms are far more favourable.”

Shareholding pattern of Yulu’s investors

• Promoter group and Esops: Under 40%
• Bajaj: Under 20%
• Magna: Under 20%
• Remaining stake: Held by VCs, institutional investors, and individuals
   

Yulu’s key statistics

• Shared EVs across India: 35,000
• User base since inception: Over 4 million
• Delivery partners served to date: 150,000+
• Green deliveries enabled: 110+ million
• CO2 emissions saved: 25+ million kg