This deal is expected to provide a crucial cash runway for the startup while it continues talks for a potentially larger round with external investors or even a strategic sale, they said.
The company’s cofounder and chief executive, Vivekananda Hallekere, confirmed the fundraising to ET and said the Bengaluru-headquartered company had already closed the first tranche of this round but denied that it was exploring an outright sale. He also confirmed the participation of Sequoia, one of the company’s largest backers, in the latest round.
“We are not in talks with anyone to sell the company,” Hallekere said, while also declining to quantify the amount secured in the first tranche of the ongoing round and the valuation at which it was secured.
Earlier this month, the company let go of over 100 employees and a similarly large number of contractual workers to cut costs, said people in the know. The layoffs were mostly at its Bengaluru office and included people in R&D, design and sales roles, among others, a former employee said. “Electric vehicles are not an easy business. There were excess expenses and they got too many people onboard,” the former employee mentioned above said.
Responding to ET’s queries on layoffs, Hallekere said the company had “trimmed down support team costs” to focus on profitability. It will be looking to hire more for roles on the original equipment manufacturer side of business, he said.
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A person close to the company said its plans include launching three vehicles this year. The company is also looking to expand in the export market and has already sent shipments to South Africa, Kuwait, South America, Sri Lanka and Nepal, this person said.Apart from Sequoia, Bounce’s investors include venture debt firm Innoven Capital, Accel, B Capital, Falcon Edge, Qualcomm, Chirate, Omidyar Network and Maverick Capital. It has raised more than $220 million till date.
The company started life as Wicked Ride, a rental service for high-end performance motorcycles. It then changed tracks to focus on app-based scooter rentals and rebranded itself as Bounce. The company amassed a fleet of over 25,000 vehicles at one point. When the Covid-19 pandemic hit, the scooter rental business was severely hurt and Bounce scaled down operations, liquidating most of its fleet of scooters.
The company again changed tracks to focus on manufacturing and selling electric vehicles (EV) under the brand Bounce Infinity. It acquired 100% stake in 22Motors in 2021 in a deal valued at about $5 million. The latter had its own plans of launching EVs as early as 2018 but those never materialised.
Bounce Infinity’s EV plans included building a battery-swapping network. This would allow the company to sell scooters without a battery, sharply cutting down the price tag. Customers could rent charged batteries from the company’s network, akin to refuelling petrol-powered scooters.