Hero Electric Vehicles on Sunday said it has raised ₹220 crore as its first part of Series B funding led by Gulf Islamic Investments (GII) along with participation from OAKS.

The company will direct this investment to support the electric vehicle industry and ecosystem. Avendus Capital was the exclusive financial advisor to Hero Electric on the transaction, the company said in a statement.

V’Ocean Investments has been advised by OAKS Asset Management (OAKS) on the investment, it said.

The electric two-wheeler market leader will allocate this investment towards expanding production capacity, consolidating market position to strengthen market leadership, invest in futuristic technology and grow footprint across India like markets.

“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 2X from the last fiscal. Hero aims to sell over one-million units per year in the next couple of years,” Naveen Munjal, Managing Director, Hero Electric, said.

This round of investments will help expand the company’s manufacturing capacities and increase R&D spends.

Pankaj Gupta, Founding Partner and Co-CEO of GII, said, “As a sustainability conscious and visionary investor, GII has observed the growing role of EVs in mitigating environmental pollution and the opportunities it presents in India, one of the world’s most populous countries and an important investment destination in the firm’s global strategy.”

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