Forbes India 15th Anniversary Special

How Exponent is building a sustainable EV infra startup

Arun Vinayak has gone from building Ather as its CPO to turning his focus to building the infrastructure to support the EV boom in the country. Now Exponent plans to expand, but sustainably, keeping an eye on unit economics and profitability

Rajiv Singh
Published: Nov 28, 2023 11:18:20 AM IST
Updated: Nov 28, 2023 11:50:06 AM IST

How Exponent is building a sustainable EV infra startupArun Vinayak and Sanjay Byalal set up Exponent Energy in 2020. Image: Amit Verma

From Day Zero, it was a chicken-and-egg problem. Back in 2014, Arun Vinayak was busy tackling the first part of the equation: Chicken. “Nobody believed in electric vehicles (EVs),” recalls the IIT-Madras grad, who was the founding partner and chief product officer at Ather. “In fact, nobody even believed that we could make EVs.” And the scepticism was valid for a bunch of reasons.

First, for a country that has grown up on petrol and diesel, EVs were alien. They were extra-terrestrial objects. Second, the product lacked credibility because it was not backed by a brand. So even when EVs started to sound credible, the whole idea that an EV can be better than legacy fuel—in terms of technology, speed, comfort, efficiency and quality—was an incredible thing to think of. “Starting up on EVs was considered a sure-shot failure,” recalls Vinayak. Third, in top cities where petrol pumps could be spotted as easily as a Domino’s delivery bike, the absence of EV charging stations added fuel to the belief that EVs won’t work in India. “Where and how will you charge?” was the right question to ask. Vinayak and his team, though, were busy feeding the chicken. Six years later, there was no question mark on EVs. By 2020, Ather established itself as a quality leader.

Closer to the end of 2020, Vinayak turned his attention towards the second part of the problem: Egg. Though EVs were spotted on the road—and there was enough intent on the part of consumers to buy them—they had not become a mass product. Potential energy didn’t convert into kinetic energy. “It was no longer about the vehicle, but the energy ecosystem which was broken,” says Vinayak. Consumers had three pressing questions: Where do I charge? How long will it take? And how long will my battery last? And there were no answers. “That triggered us to start Exponent Energy,” says Vinayak, who along with Sanjay Byalal, co-founded the energy-tech startup in October 2020.

How Exponent is building a sustainable EV infra startup
Though Vinayak found the egg, it was tough to hatch it. “Again, nobody believed us when we said that we would charge vehicles in 15 minutes,” smiles the co-founder and CEO of Exponent, which raised $5 million in its pre-Series A round of funding in December 2021, and started commercial operations in March 2023. If rapid charging batteries and technology looked like a fantasy tale, then there was another problem which had become incredible: Can the EV charging business ever be profitable? Well, if the business had to make money, then scores of vehicles have to be charged in a short span of time. Fast charging was the only solution.

Fast forward to November 2023. Vinayak reckons that he has successfully hatched the egg. Exponent’s battery packs, charger and connector, he claims, can rapid charge EVs in 15 minutes. What has also grown rapidly is a long list of backers—Lightspeed, YourNest VC, 3one4 Capital, AdvantEdge VC, Motherson Group, and the family office of Pawan Munjal—who have pumped in $18 million so far in the startup. Exponent, which started from Bengaluru, has now expanded to Delhi NCR and plans to foray into Mumbai, Hyderabad, Chennai and Ahmedabad by the end of this fiscal. “Our first set of investors took a big bet on the team and our track record at Ather,” says Vinayak.

The backers are delighted with Exponent’s promising start. “The team has a distinctive grasp on their business model,” says Sunil Goyal, managing director at YourNest Venture Capital. The co-founders, he underlines, focussed on building an energy company that was aimed at addressing a large problem for OEMs (original equipment makers), fleet operators, charging infrastructure providers and consumers. “They envisioned that their products will create substantial value for all players in the ecosystem,” he says, adding that despite a high risk of failure, he was confident that the founding team was more than capable of achieving the goal of 15-minute rapid charge.

How Exponent is building a sustainable EV infra startup
Vinayak, for his part, maintains that it’s still early days for the startup which claims to have cracked the viability issue of the charging business. “When we started, we knew that we had to attack the inherent unit economics which was not conducive,” he says. “Today, one of the problems in charging stations is that they don’t make money,” he says. One buys a piece of land, and ends up charging only a few EVs. “It was a terrible business,” he says, adding that Exponent had tackled the problem by looking at both sides of the spectrum. On the vehicle side, he explains, the startup has been providing a seamless experience. “And on the network side, now people are making money.”

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The next big task for Exponent is expanding its reach. In September, it announced a partnership with Montra Electric, the EV brand of Murugappa Group, to develop rapid charging EVs in the three-wheeler segment. “We are adding more OEMs and expanding into new segments,” says Vinayak, adding that the startup will sharply focus on commercial vehicles over the next few years. “They’re 10 percent of the vehicles on the road, but they consume 70 percent of energy in India. So, sustainability wise, that’s clearly the market for us,” he adds. Commenting on the Indian EV market, which has been expanding at a furious pace over the last few years, Vinayak reckons that the pace is not going to slow down. “The energy in the whole ecosystem is electrifying. It’s a great time to be building in India,” he says. Till 2000, the first-generation founder underlines, the largest companies in the world were energy companies. Then, the next decades belonged to the tech companies. “I think in the next 20 years, the largest companies will be energy tech companies,” he signs off.