ZEVO eyes first-mile and mid-mile delivery after conquering last-mile EV logistics

Indian last-mile delivery is making a seamless switch to electric mobility, helped by government policies, cheaper electric vehicle (EV) fleets and increasingly robust charging infrastructure in major cities. Today, if you live in a Tier I city, it’s more likely than not that your food order or that trendy outfit you ordered online is arriving on an electric ride. 

Realising this opportunity, ZEVO began its operations in 2022, with four EVs purchased on their co-founders’ credit cards. The company provides fleet services to a range of companies, including online grocery platform BigBasket and delivery company Shadowfax, among others. 

Roughly three years later, ZEVO is clocking in Rs 60 crore in annual recurring revenue and is targeting Rs 300 crore by the next financial year. 

Additionally, the company is aiming to turn EBITDA positive in the next four to five months, after which the company will focus on attaining profitability as an organisation. 

“We are not profitable as of today. However, every vehicle on its own is profitable. On the net level, because of underutilised charging parking space, we are yet to become overall profitable. As and when we deploy more assets, the capacities will be fulfilled and we will be able to become overall profitable,” Aditya Singh Ratnu, CEO and Co-founder of ZEVO, tells YourStory.

How it started

ZEVO’s co-founders Ratnu and Dhruv Bhatia share a long history, one that traces back to their childhood. The duo met each other while in school and went on to become friends. Later, both did their B.Com Honours and Chartered Accountancy programmes together. In fact, both became CAs on the same day. 

Their plan was to begin a business-to-business (B2B) EV fleet service in April 2020, but the pandemic made them postpone their plan for a year and a half. However, during the time, the pair doubled down on their research into the sector. 

“If you come to our office, you will see almost 8,000 to 9,000 pages of research that has gone into the business. That is how we are able to deliver what we are delivering today,” Ratnu says. 

One of the main challenges that ZEVO initially faced is one that many fleet operators face—lack of capital. The process of running fleets is a brutally expensive affair. 

Both Ratnu and Bhatia pooled in their credit cards and got the first four EV commercial vehicles for ZEVO, that cost about Rs 18 lakh back then. Soon, they got their first customer, Zomato Hyperpure, the food-tech major’s B2B supply arm that delivers high quality ingredients to restaurants, cafés and cloud kitchens. 

“We started with Hyperpure from Pune and till date we do not have a sales department. It is only the word of mouth that has helped increase our clientale. Zomato told BigBasket, who in turn told other clients. Today, we have a barrage of 50 clients. We are at 2000 vehicles deployed across India and as of now we are present in more than 20 cities,” Ratnu adds. 

On the capital front, the co-founder notes that the tides are slowly turning in favour of electric mobility. When the company first launched, the only way to purchase vehicles was through offering equity. However, the company soon began seeing interest from international partners such as oil and gas company Petronas and a few Japanese banks that have been actively leasing and lending in the Indian EV sector. These alternate financing means have played a crucial role in accelerating EV fleet adoption in India. 

“I met a few honourable ministers recently and there is a very clear mandate from the government that every company doing delivery services has to convert to EV. It has multiple benefits. Number one is the environment. Number two is the cost for the end customer. And number three is the lower dependency on

fossil fuels that we are completely import dependent.”

The path forward

India’s last mile delivery segment is booming, mirroring a similar growth in quick commerce and ecommerce segments that are now looking for means to get orders to their customers both quickly and sustainably amid increased consumer awareness. 

For ZEVO, this means there is rising competition and the need to innovate their offerings to stay ahead of this curve. As part of these efforts, the company is going to enter into first mile delivery service, which refers to the initial part of the delivery process involving transporting goods from manufacturer, supplier, or warehouses to a central hub. These often involve large ships across cities and regions. 

ZEVO is also focusing on its refrigerated temperature control segments which Ratnu adds is a first in the EV space today.

“Our focus is on the refrigerated temperature control segments which is we are the first company to launch. We are the first to launch an electric refrigerated vehicle in partnership with IIT Delhi and that has panned out to be very nice. We have a lot of orders for this year for refrigerated EVs and I think that's a $10 million market in India annually and it's completely untapped and no players in it as of today,” he says.

Currently, the company competes with Magenta Mobility in the space. 

While electric vehicles have seamlessly been integrated into last mile deliveries, range anxiety and slow developing battery charging infrastructure has often discouraged EV adoption in first mile deliveries. ZEVO intends to change this through their bigger trucks. Trials for these vehicles, running between 400-900 kilometers, have already begun. 

“Our focus for this year and the next year will be last mile and mid mile deliveries,” Ratnu says. 

ZEVO’s fleet is a mixed bag of vehicles that can use battery swapping infrastructure and charging infrastructure. However, the company is quite bearish on battery swapping. 

“It's a very costly affair for B2B partners to be using battery swapping wherever. See, the point in commercial deliveries is that you cannot deliver to any customer between midnight and 6 a.m. At that point of time, the vehicle is idle. It is best to use slow charging and that is very cost effective. So, you see a lot of swaps coming in the two-wheeler segment but it's not working out very well in the three-wheeler, four-wheeler segment,” the co-founder adds. 

Additionally, the company will be setting up charging hubs at pick-up points and a charger at delivery points. The company has also set up hubs in between standard routes and have tied up with charging infrastructure players in case the vehicle has to charge while en-route to locations. 

Currently, the company is working towards dispersing 5,000 assets and recently raised $2 million in a Pre-Series A round led by Pegasus India Fund, BizDateUp, JIIF, and a family office. 

The company has also strategically slowed down the deployment of their two-wheeler assets because of the quality of these vehicles coming into the market. Currently, the company has about 900 two-wheelers in its fleet. However, going forward, the company is focusing more on three-wheeler and four-wheeler segments. 

EV adoption in the last mile delivery segment has been driving up demand for electric fleets and companies are increasingly integrating EVs across their supply chain to ensure cost-efficient and eco-friendly operations.

Government incentives coupled with advancing charging infrastructure in the country and technological advancements in battery technology are spearheading a new use case for these vehicles and companies like ZEVO are benefitting from it. 

ZEVO sees 45% of its business coming in from Tier II and III cities. The company is planning to expand to 10 new cities this year, out of which it has already launched in Indore and Kolkata. The company is also looking to close its $20 million funding tentatively in the next couple of months.