Everlectric, a South African startup providing full-maintenance leases of commercial electric vehicles (EVs), has secured venture debt funding from the Vumela Fund. This investment comes as South Africa experiences a surge in interest in electric and hybrid vehicles, mirroring global trends.
Global EV stock surpassed 16 million vehicles in 2022, a 60% increase year-on-year, according to the International Energy Agency (IEA). While adoption rates are still relatively low in South Africa compared to other markets, the National Association of Automobile Manufacturers of South Africa (Naamsa) reported record sales of new energy vehicles (NEVs), including EVs, hybrids, and plug-in hybrids, in 2023, with growth continuing into 2024. Third-quarter NEV sales in 2024 were up 88% compared to the same period the previous year.
Everlectric focuses on commercial battery electric vehicle (BEV) panel vans, targeting logistics providers and other businesses. The company offers a comprehensive leasing package, including access to charging infrastructure and a smart device platform. This approach aims to address common concerns about EV adoption, such as range anxiety and charging logistics.
Ndia Magadagela, co-founder of Everlectric, highlighted the significance of the Vumela partnership: “This venture debt is the right catalyst, at the right time, with the right debt provider, enabling Everlectric’s growth.”
The Vumela Fund, a collaboration between FNB Business Banking and Edge Growth, provides growth capital to black-owned small and medium-sized enterprises (SMEs) in South Africa. Philippa Lloys Ellis, Investment Principal at Edgegrowth, expressed confidence in Everlectric’s potential: “Everlectric has developed an innovative solution to assist South African businesses with their transition to EV fleets, addressing most of the concerns that exist around the adoption of EVs.” She added, “We have been impressed by Everlectric’s innovative, organised and ambitious management team.”
The venture debt structure is designed to provide non-dilutive capital to venture-backed scale-ups, allowing them to fund growth between equity funding rounds. This type of financing is becoming increasingly popular among startups seeking to minimize dilution of ownership.
Mike Sage, FNB’s Investment Capital Head and a Vumela Trustee, emphasized the fund’s commitment to sustainable outcomes: “Everlectric is pioneering the transition of business fleets onto EV platforms which we believe creates longer-term sustainable outcomes.”
Everlectric’s model addresses several key challenges to EV adoption in South Africa. By leasing vehicles and providing charging solutions, the company removes the upfront capital expenditure and mitigates concerns about charging infrastructure. Furthermore, decoupling operational costs from fluctuating fuel prices offers businesses greater financial predictability. A leading South African multinational retailer is already using Everlectric’s EVs for customer deliveries, demonstrating the viability of the model.
Founded in 2020 by Ndia Magadagela, Paul Plummer, and Wesley van der Walt, the company believes that its early entry into the South African EV market positions it for significant growth. By focusing on a holistic service offering, Everlectric aims to simplify the transition to electric vehicles for businesses and drive wider adoption of sustainable transportation solutions.