Electric scooter manufacturer Hero Electric has announced that it has raised ₹2.2 billion (~$29.5 million) as the first part of its Series B funding. Gulf Islamic Investments (GII) and Hero Electric’s existing investor OAKS Asset Management (OAKS) (formerly Alpha Capital) led the funding round.

The company said this funding would be utilized to expand its production capacity, consolidate its position in the market, invest in new technologies, and enhance its footprints across markets like India.

To double its sales annually, the company plans to build multiple manufacturing facilities over the next couple of years. The firm would also look at India-centric, flexible, and cost-effective advances to drive electric mobility’s growth in India.

According to Hero Electric, the company leads the electric vehicles (EV) market with a 35% share and over 350,000 electric two-wheelers across India. In addition, it has over 700 sales and service centers across the country.

Commenting on the funding, Naveen Munjal, Managing Director, Hero Electric, said, “The EV market has undergone tremendous change over the last few years since we raised our first round of funding. The policies are extremely conducive for the growth of the segment, and despite the pandemic, the company is poised to grow at over two times from the last fiscal.”

“Hero aims to sell over 1 million units annually in the next couple of years. This round of investment, which is a first of a larger program, will help expand our manufacturing capacities and increase research and development spend that will enable us to continue to launch innovative products to disrupt the category,” Munjal added.

Hero Electric had raised ₹1.6 billion (~$21.45 million) in Series A funding from Mumbai-based Alpha Capital Advisors in December 2018.

Mercom had earlier reported that Hero MotoCorp, manufacturer of motorcycles and scooters, had invested ₹840 million (~$11.25 million) in Ather Energy, an electric scooter manufacturer.

Last month, the Department of Heavy Industries had announced partial amendments to the Faster Adoption and Manufacturing of Electric Vehicles in India Phase-II (FAME-II) program. Specific demand incentive for electric two-wheelers of ₹15,000 (~$205)/kWh has now been announced. Earlier, there was a uniform demand incentive of ₹10000 ($137)/KWh for all vehicles.

Last year, despite the Covid-19 pandemic, many EV companies raised funding that could shape India’s electric mobility landscape in the coming years.