Delhi startup Baaz Bikes seeks to win EV mobility space by solving for gig workers

The buzzword of the automotive industry, and of the startup world, is certainly Electric vehicle (EV). Industry Bigwigs — Whoa and Other — are no longer the only ones pushing towards a greener future, but a host of startups across India are assessing every segment/stakeholder in the EV revolution and building solutions for the same.

One such startup in space is Baaz Bikes which seeks to address the mobility needs of production/delivery workers with its “cost-effective” end-to-end EV mobility platform.

The Delhi-based startup sells its in-house assembled bikes to its chain of rental partners who use the platform to further rent out these bikes to the gig workforce. The startup has installed automated drum-swap stations/machines in regions accessible to gig workers or “Baazigars”, which can benefit from the full field support of rental partners.

The objective is to build all ecosystemincluding bike, battery swapping stations and softwareto help a construction worker start their journey in the most cost effective way.

A bike specially designed for the “Baazigars”

The founders – Anubhav Sharma, Shubham Srivasatava, Sahil Singh Malik, Abhijeet Saxenaand Karan Singla — established the genesis of the startup, starting with a strong founding team and industry expertise that helped them build a specific product.

Motorsport enthusiasts and budding engineers were brought together by IIT Delhi Motor ClubFormula Axlr8r Racing. They had built a Formula car together, thanks to which they became the first and only Indian team to run their electric car on the prestigious F1 circuit in Germany.

“By working together on several automotive projects, we had formed a team. We realized that we had unique ideas to build world-class electric vehicles and the opportunity had to be exploited,” says Anubhav.

In 2018, the engineers donned the entrepreneurial hat with their first company, ElecTorq Technologies (head quarter). They continued to work on their flagship product, the Baaz Bike, while creating key automotive products for customers like Vogo and Rapido. The first generation of the bike was ready in 2019.

Team Axlr8r Formula Racing (IIT-Delhi Automobile Club)

The pandemic has laid bare a once-in-a-lifetime opportunity for founders, who witnessed the rise of the “delivery culture” and decided to address the workforce issue behind it.

“There was no specific platform aimed at making life easier for gig workers. Their income in hand is the result of how much they earn and spend. There are many companies like ShadowFax, Zomato, Dunzo, etc. that focus on increasing their revenue. More orders, more revenue. We focus on the expense side, which includes the cost of buying, maintaining and operating a vehicle, which is extremely high for a construction worker to maintain or afford,” explains the founder. .

In a typical scenario, a gig worker approaches a rental company and pays a fixed price for an EV rental, starting at Rs 5,000 – Rs 8,000 per month. However, this initial cost remains invariant to the income generated by the worker each month, which can sometimes be lower than the fixed cost itself. On top of that, the worker is responsible for everything from billing to tech support.

This brings us back to the statement of how Baaz Bikes is trying to create a differentiator in the market. The most important being its targeted market for gig workers and a specially designed product.

“The two-wheeler use case varies by provider. We are concept driven and built specifically for gig workers. It’s a sturdy product, has no plastic components that could break, and is designed to travel 120 km a day without hurting your back, etc. says Anubhav.

Then comes the cost efficiency or the unit savings for a gig worker himself. The platform sells the bike to the rental partner at a fixed price (30,000 rupees per bike), who then rents it to the construction worker for a monthly rent as low as 1,500 rupees. The worker is then billed per kilometer, which proves beneficial for him, especially on days when he has limited deliveries.

Rental partners operate as micro-entrepreneurs and take care of all field support, providing workers with a point of contact in the event of a problem.

“The total costs for a construction worker could be the same in both cases, but they will have the advantage of a low initial cost, comfortable ergonomics over long distances and durations, an exchange network hyperlocal battery system that would maximize vehicle availability, and a supporting ecosystem in the field,” says Anubhav.

The third differentiator, according to the founders, is the value of building the entire ecosystem which includes bikes, battery exchange and software. This makes sense for a player like Baaz operating in a hyperlocal space.

The idea goes in the same direction as The network of the Taiwanese company Gogoro, which has in-house Smartscooters and a complete modular battery exchange infrastructure of 2,000 GoStations. It further offers vehicle innovations to partner automakers such as Hero, Yamaha, Aeon Motor, eReady and eMOVING, automotive products (carbon belts, battery cells and performance tires), in addition to having its own service sharing electric scooters.

“We aim to create a one-stop-shop for everything a gig worker needs to start their journey. Everything will be offered internally with limited dependence on third parties or partners”, specifies the founder.

Revenue model

The platform makes money from selling bikes to rental partners with a margin of around 20%. On top of that, the startup is looking to make money from the cost per mile it charges on battery swaps.

A single battery works for about 50-55 km.

At present, the startup is profitable on cost per kilometer (positive contribution margin) and has about 50 bikes (proof of concept) and live exchange stations in two major areas of New Delhi, Saket and Malviya Nagar. Automatic battery exchange stations have been installed in kiranas and restaurants at present.

The startup has set up its assembly plant in Faridabad, Haryana, and plans to produce 1,000 bikes over the next 120 days and 5,000 by the end of FY23. The size of the fleet purchased by a dealer can start from 50 to 250 bikes.

“Our request pipeline is sorted. Delhi is divided into approximately 70 clusters and we aim to replicate the playbook in these clusters by mid-2023 (over 40,000 delivery frames). It will be a radial expansion. We have built a lean and scalable business model for better unit economics in distribution and delivery,” says the founder.

Competition, Market Size and Future Plans

There are many local small businesses and two-wheeler rental startups like Yulu Bikes and ZyppComment that operate in space.

The closest competition comes from Yulu Bikes which follows a shared mobility model owned and operated by Yulu where people can pick up these e-bikes at the nearest public spots on a short or long term basis (longer rental plans for gig workers).

The same model is operated by third-party franchise partners. However, Yulu’s target audience is not entirely geared towards gig workers, but people who need a second vehicle to cover short distances.

Baaz also faces competition from Gurugram-based Zypp. Startup D2C EV focuses on workers and logistics and helps its delivery people buy a scooter on EMIs.

Baaz Bikes mentioned $2.3 million (Pre-Series A) to date, and is supported by Kalaari Capital, AdvantageEdge, 9Unicornsand Sumant Sinha (CMD, Renew Power). The startup is in talks with investors for a A-Series funding, and aims to complete the cycle in the near future. It envisions an average execution rate (ARR) of $5 million by the end of the current fiscal year.

“We are already a profitable per kilometer business. We are not fighting on that side. We are currently focused on product development and refinement, and we are investing heavily in that,” says the founder.

The demand for delivery frames will continue to increase in the future in industries such as construction, manufacturing, retail, transportation, and logistics. Much of the demand comes from India’s fast trade market, which is expected to grow 15-fold by 2025, representing a $5.5 billion market and catering to more than 20 million households in India, according to a recent report from management consultancy RedSeer.

About Jimmie T.

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