The Rise and Fall of Log9 Materials
Log9 Materials, a startup once heralded as India’s deeptech darling, has faced a dramatic downfall. Despite raising over $75 million in funding, the company struggled to adapt to the shifting realities of the Indian EV battery market. The company’s journey began in 2015 with ambitious plans to develop groundbreaking fuel cell technology using aluminum and graphene. However, multiple pivots and technology failures led to its current financial crisis.
Early Promise and Funding
Founded by Dr. Akshay Singhal in 2015, Log9 initially gained attention for its innovative aluminum-air fuel cells. The company secured $3.5 million in Series A funding from investors like Sequoia Surge and Exfinity Venture Partners. By 2019, Log9 claimed its technology would offer 30%-40% lower costs than lithium-ion batteries. Major players like Amara Raja Batteries Limited invested, further boosting its credibility.
Strategic Missteps and Challenges
Log9 shifted its focus from aluminum-air fuel cells to lithium-titanate (LTO) batteries, a type of lithium-ion battery. Despite significant investment in a cell manufacturing facility, production faced delays due to machinery setup issues. The company simultaneously entered the EV leasing business, which initially boosted revenue but ultimately proved unsustainable. Customers complained about the performance and cost-effectiveness of Log9’s batteries compared to cheaper alternatives.
Technological and Market Challenges
The LTO battery technology faced significant challenges. Experts noted that LTO batteries were not ideal for India’s climate and were more expensive than lithium iron phosphate (LFP) batteries. By 2024, the price of China-exported LFP battery cells had almost halved, making Log9’s LTO batteries uncompetitive. The company’s failure to adapt to market realities and its expensive technology led to dwindling demand.
Financial Crisis and Legal Battles
Log9’s financial situation deteriorated rapidly. The company laid off most of its workforce, sold parts of its business, and faced legal battles with customers over payment disputes and technology performance issues. By late 2024, nearly 180 employees had been let go, leaving only about 40. The company’s debt mounted to INR 200 Cr, with significant losses reported in FY24.
Industry-Wide Challenges
Industry experts attribute Log9’s downfall partly to broader challenges in India’s EV logistics sector. Fleet operators face margin squeezes, leading to the repossession of vehicles by financiers. The lack of proper underwriting and high maintenance costs further complicate the situation. Log9’s expensive battery technology, coupled with the industry’s overall struggles, sealed its fate.
What’s Next for Log9?
Log9 has denied allegations of bankruptcy and is exploring capital raises from strategic partners or divesting more business verticals. The company claims an order book worth INR 80 Cr to INR 90 Cr for its LFP battery packs. However, with VC investors being cautious on valuations, a major fund infusion seems unlikely. Potential acquisition by another OEM for its battery technology remains a possible outcome, though the prospects of Log9 making a successful comeback appear slim.
The story of Log9 Materials serves as a cautionary tale for deeptech startups navigating the complex EV battery market. It highlights the challenges of scaling technology-intensive businesses and the importance of adapting to market realities.
