The company earmarked the fund for scaling up its operation, expanding its research and development (R&D) as well as accelerating its electric two-wheeler production.

MAKA Motors founder and CEO Raditya Wibowo said on Thursday, the start-up aims to conduct its R&D within the company as opposed to outsourcing them like other EV firms.

He argued this could help the company mitigate the risk of missing out on crucial user insights and potential cost efficiencies. This includes allowing them to maintain control over their supply chain.

“We are excited to partner with those who understand and support our R&D-first approach in our endeavors,” MAKA Motors founder and CEO Raditya Wibowo said in a statement on Thursday.

The statement detailed that the company’s first product is currently in development and scheduled for market launch next year. Its first batch of electric two-wheelers, however, is expected to be ready for deployment this month.

MAKA Motors is also planning to channel the funds for a factory in West Java, scheduled for ground-breaking later this year.

Founded in 2021, the company is looking to produce electric two-wheelers that have a good balance of driving range, power, usability and durability. MAKA Motors said it plans to sell them at competitive prices compared to existing e-bikes in the market.

Home to over 127 million motorbikes, Indonesia is the world’s third-largest market for two-wheelers. However, only around 43,000 of them are EVs, according to the statement.

Moreover, it detailed that the annual sales of new two-wheeled vehicles were projected at between 6 million and 8 million, spelling great untapped potential, particularly for EVs.

The industry itself is still in its infancy phase but the government has been heavily promoting the use of EV through a subsidy and tax incentives.

Read also: Govt earmarks Rp 1.75t for electric two-wheelers 'assistance'

SV Investment managing partner, David Junghun Bang said the VC viewed Southeast Asia as having great potential, especially Indonesia as the region’s largest economy, which could help spearhead development of EVs in the region.

“The EV sector is still at a very early stage in Indonesia, but we see the sector rising very rapidly in the near future backed by government initiatives and prominent players,” said Bang in the same statement.

Read also: Indonesian EV early adopters face long road ahead

He went on to say that the VC was looking to connect the start-up with relevant South Korean players, given that the country was already an advanced market of EV technology.

Other VCs also joined this funding round, they are Northstar Group, Provident, AlfaCorp, Skystar Capital, Peak XV Partners, Openspace Ventures, Shinhan Venture Investment, BEENEXT, Kinesys Group and M Venture Partners.

“We believe in the company’s capacity to innovate and optimize its supply chain. We also have conviction about the team’s deep understanding of the local market, derived from extensive research and sectoral experience,” said AC Ventures founder and managing partner Michael Soerijadji in the same statement.