The Log9 Collapse: How The Battery Tech Startup Fell From Glory

Amid the BluSmart-Gensol saga, which has become the new focal point for the debate around startup corporate governance lapses, the downfall of Log9 Materials has largely gone under the radar.

After raising more than $60 Mn from VCs and industry majors, Log9 has struggled to adapt to the shifting realities of the Indian EV battery market. 

After multiple pivots and technology failures, the 2015-founded EV startup is now embroiled in legal battles with customers and burdened with mounting debt. Key decisions taken by the company around battery chemistries have proven to be strategic mistakes. 

Under severe financial pressure since last year, Log9 has laid off the majority of its workforce, lost a cofounder and is in the process of selling parts of itself to save the ship. 

Sources told Inc42 that hardly any employees remain at the company. While its Bengaluru and Delhi facilities are open, physical centres in Hyderabad, Jaipur, Mumbai, and Chennai have been completely shut down. 

So what went wrong for the company, which was once heralded as India’s deeptech darling? How did a company that made headlines until 2023 for its bold claims around India-manufactured cutting-edge battery and cell technology fall apart so quickly?

Well, the answer isn’t straightforward, and it involves several layers from the company’s tech stack, its decision to pursue leasing model and its failure to address customer issues. Employees also blame the management for steering the ship into directions that were not profitable. There was also a fundamental misjudgment of how to scale a tech and asset-heavy business using VC money, employees said. 

How Log9’s Promise Faded Away 

When Dr. Akshay Singhal started Log9 Materials in 2015, the idea was to build a groundbreaking fuel cell technology with aluminium and graphene. Kartik Hajela and Pankaj Sharma joined him soon, and the trio started building these cells that could beat lithium-ion (Li-ion) cells and cater to the growing EV market in India. 

Four years after starting out in a brand new category, it caught the eye of Sequoia Surge (now Peak XV) and Exfinity Venture Partners who infused $3.5 Mn in a Series A funding round.

In 2019, Log9’s CEO Singhal told Inc42 that its aluminium-air fuel cells were expected to have a 30%-40% lower cost than Li-ion batteries, and also a better fit for India’s climatic conditions and due to the domestic availability of aluminium.

Over the next two years, the likes of Amara Raja Batteries Limited (ARBL), a major player in the automotive battery world, invested in Log9. But soon enough, Log9’s technology emphasis started shifting from aluminium-air fuel cells to innovation in LTO cells, a kind of Li-ion battery.

By this time, the Bengaluru-based startup had become one of the poster boys of deeptech innovation and R&D in India’s nascent EV industry. The startup also managed to rope in a trusted global name onto its cap table when PETRONAS Ventures invested in a $40 Mn round in 2023.

Log9 had the backing of some of the most noted investors in the game — in the energy space and in the Indian deeptech startup ecosystem. In its lifetime, the startup has raised close to $75 Mn in equity funding and much more in venture debt and from banks. 

The company had three key areas of operations and revenue sources: cell manufacturing, battery manufacturing, and EV leasing. The stack looks something like this: cell manufacturing is linked to battery manufacturing, which further boosts the leasing business.

 

However, Log9 started with battery manufacturing as this was its forte. It shifted its focus from one battery chemistry to another as the market evolved from its early days. 

An EV battery can be manufactured or assembled with imported cells or companies could produce the cells in-house. Log9 chose the latter to support its plan of owning the full stack, which we have alluded to above. 

But before it could start cell production in-house, the startup kept depending on cells imported from China for its battery packs. 

In 2022, it invested INR 150 Cr to establish a cell manufacturing facility in Bengaluru’s Jakkur area, which would become a key part of the battery business. The plan was to produce 50 megawatt-hour (MWh) of cells every year in Jakkur, but the facility only became operational in April 2023. 

And even then, the production never really took off properly as Log9 claimed technology experts couldn’t arrive on time to set up the machinery imported from China due to delays in visa approvals. 

However, even before manufacturing its own cells, Log9 had started the less capital-intensive EV leasing business in 2022. All of a sudden, this became a major source of revenue with two OEMs coming on board — Omega Seiki Mobility (OSM) and Quantum.

The OEMs deployed Log9’s batteries in their vehicles, which were then purchased by Log9 and leased to other fleet operators and delivery startups. Log9 relied on financing platforms such as Revfin, Alt Mobility, Gentari and others to buy these vehicles. 

To be sure, most of these vehicles were not on Log9’s books, given that they were bought by asset management companies on behalf of Log9.

However, the leasing model worked. Log9 managed to grow revenue from INR 25.5 Cr in FY22 to INR 74.4 Cr in FY23 and then INR 110.3 Cr in FY24, solely based on this leasing business. In FY24, the company made INR 118.6 Cr in losses compared to INR 88.4 Cr in the previous fiscal, with debt mounting to INR 200 Cr.

An industry expert said that entering the leasing business solved two problems for the company — it gave them a significantly higher revenue, and Log9 could show its business was on track. 

But Log9’s core proposition is battery and cell manufacturing. Without the battery tech and the right chemistry, Log9 does not have any technology IP and is essentially then just a leasing player. Inc42’s investigation found several tech lapses within these key areas. 

Customers of Log9 pointed out that many of its vehicles could not deliver the optimum speed or range and were therefore proving costlier to manage. So the problem was in the batteries and the deeptech aspect of Log9’s operations. When we took a closer look at the cells that make up these batteries, that’s where the real problem appears. 

Log9 Materials’ Shaky Battery Tech Stack

Today, Log9’s cell manufacturing business is potentially a dead end, as the company cannot compete with Chinese economies of scale for cell manufacturing.  

Was this expected? Yes, say experts. So why did a battery giant like Amara Raja invest in the company?

As per an industry expert, Amara Raja’s bet on Log9 Materials was just a hedge. “Amara Raja was looking to start indigenous cell manufacturing for years and was considering various cell chemistries. When they found Log9 was already building a technology around it and had good promises, the company decided to invest in it, just like it was another R&D investment. If it works, good; if not, it’s not a big loss for the company,” our source said.

Deeptech is hard. From huge investments to a long product-building period — these are parts of the deeptech game. 

In Log9 Materials’ case, the geopolitical uncertainties for exports and imports between India and China for key sectors is also a challenge. High cell prices for imports from China and the lack of a robust EV charging infrastructure or battery manufacturing ecosystem in India have hamstrung many a battery tech player. 

The first elephant in Log9 Materials’ room is its choice of lithium-titanate or lithium-titanium-oxide, aka LTO batteries, which are not reputed to be made for India’s harsh summer heat. In comparison to lithium iron phosphate or LFP batteries, LTO batteries are claimed to offer lower range due to low energy density and drain faster when operating in hot conditions. 

On the flip side, LTO is reputed to be safer than LFP, and the battery cells can be charged faster, and they have a longer cycle life. But, offsetting all these benefits is the fact that LTO is also more expensive to import than LFP. 

For many of the end customers that Log9 was catering to, the benefits of LTO chemistry were perhaps not clear enough to justify the higher price. But OEMs, who are better versed with battery tech, jumped on to Log9’s RapidX LTO batteries because of the tech. 

Eventually, this points to a mismatch in the market. OEMs want the best tech possible, but eventual operators of EV fleets hardly care about these factors because a lot of them have factored in high maintenance costs. They just want to pay less upfront for the EV, and Log9 was clearly the more expensive option. 

The bigger body blow for Log9 came from the price of China-exported LFP battery cells almost halving in 2024. As per a Bloomberg report in July last year, the prices were down to $53 per kilowatt-hour (kWh) from $95 in 2023.

Speaking to Inc42, Log9 Materials cofounder Pankaj Sharma blamed this price shift for the collapse of LTO battery fortunes in the market. He also said the quality of LFP batteries had improved from the time when Log9 made the decision to hitch its ride to LTO.

“About two and a half years back, we started with LTO as a chemistry, and at this point, the China-made LFP batteries were about 2X cheaper than ours. So, LFP was always cheaper than LTO, but the performance was extremely poor. Today, Chinese LFP performance has improved substantially. They are also available at about $45 per kWh compared to $130 per kWh, whereas Log9 is buying LTO cells at $350 per kWh, creating more than a 4X gap,” said Sharma.

This was always doomed to fail. 

All in all, India is a price-sensitive B2B market for new models like EV fleets. OEMs no longer prefer LTO batteries because of the massive price gulf, which led to Log9 seeing dwindling demand. Plus, the company could sell its batteries only through two OEM partnerships at this point, so its market reach was also small. 

Mismanagement And Key Exits Hit Log9

Log9 knew this challenge was coming and it had already pivoted to making LFP batteries in-house in 2024. 

As per cofounder Sharma, the company needed more money to change a few aspects of its existing factories, including machinery, to scale the production of the LFP batteries. And that’s where things got stuck.

The company was trying to raise more funding since the beginning of 2024, as it ran out of cash. These attempts have not been successful, but before we look into that, we have to ask: Where did all the funding go? 

The answer lies in the heavy debt it accrued in its books and a lack of proper corporate governance skills. In this context, it is also important to highlight that Log9 is now fighting a legal case with a Delhi NCR-based EV fleet operator, Bluwheelz, among other vendors. 

Customers of fleet operator BluWheelz, who were using vehicles provided by Log9, raised complaints about the quality of the EVs and range.  Some Log9 vehicles were asked to be taken back and replaced with Euler vehicles, for example.

Chanpreet Singh Sethi, cofounder and CEO of BluWheelz, told Inc42 that this disruption led to INR 3 Cr to INR 3.5 Cr in losses for the company in October and November 2024, which is the peak season for delivery fleets due to the festive season. 

Besides, Log9’s vehicles were priced at around INR 5.5 Lakh, compared to LFP-battery vehicles which would cost INR 4.4 Lakh, Sethi said.

BluWheelz and Log9 are currently embroiled in a legal battle, with both parties sending notices to each other. Log9 alleges BluWheelz never paid for the service and, therefore, it could revoke access to its vehicles. On the other hand, BluWheelz alleges Log9 did not meet the service standards required to demand the full payment.

Log9 has sent a legal notice to BluWheelz demanding payments of an outstanding debt of over INR 1.33 Cr.

BluWheelz, in turn, alleges Log9 started indulging in “fraudulent and unethical activities” by inflating bills and billing the company even for the vehicles that were returned.

“Post our legal notices, Log9 filed a totally false and fabricated case against us in January 2025 to hide their unethical practices and their failed technology,” the company told us.

Coinciding with this legal back-and-forth, Log9 sold its railway battery technology unit and an associated manufacturing facility to Jupiter Electric Mobility for INR 40 Cr. 

Log9 cofounder and COO Kartik Hajela resigned from the company to join JEM as director. Sources told us that Haleja was instrumental in closing B2B leasing partnerships, and his departure was a big blow for the business.

Besides BluWheelz, several other fleet operators and last-mile delivery companies were late on payments and defaulted on the payables timelines. Log9 cofounder Sharma said many customers would pay only 15-20% of the total receivables every month. 

This is a problem that plagues the EV logistics industry at large — more on this later.

Even though Log9 wasn’t paid, the company had to meet its venture debt and loan repayments, which pushed the company into a borrow-to-repay cycle, leading to higher and higher interest payments every month. 

The situation grew grimmer in September last year, when the company was forced to start layoffs. Since November last year, nearly 180 employees have been let go with just about 40 people currently in the company. 

Then Log9 also told its financiers to begin repossession of assets because the company had run out of cash.

A former employee blamed the complacent attitude of the top management in solving the debt situation and recovering the receivables. Sources say Fulfilly, BluWheelz, and about 20 other vendors did not fulfil their payables. And Log9 did not have the staying power to negotiate with these vendors. 

Sources alleged that employees are due salary for three months as well as their provident fund contribution. The company did not address whether it would be fulfilling these payments 

Log9’s Sharma said, “Yes, we have asked people to leave, because we don’t have money in the system, so there’s no point keeping the payroll pending. Let people go, find more jobs, settle somewhere, and in a month or two, when we start to revive the company, we will hire them back. When you have, let’s say, 30-40 people, and no business, that’s still okay, because these people will restart the business.”

 Questions sent to a few Log9’s investors were unanswered. 

Did Log9 Succumb To EV Industry Issues?

As we hinted earlier, India’s EV fleet operators and last-mile delivery platforms are suffering and bleeding cash as a result of the margins squeeze in the logistics and delivery business, several industry experts told Inc42.

Tanvir Singh, cofounder of SAR Group-owned battery-as-a-service provider Mooving, told Inc42, “Last-mile delivery in India has an upper ceiling where delivery companies like Zomato or Swiggy or anyone can only pay a certain amount of money. So, these logistics players are forced to balance between a high cost of finance and a low quality of products.”

Singh, who has seen the EV logistics boom up close, said that most fleet companies in India have chosen the wrong products, and after one year or so, these vehicles would start needing high maintenance and OEM support. 

As EV fleet operators suffer, there is a trickle-down effect on OEMs and vehicle leasing companies. In fact, as per Vahan data, it is only the likes of Bajaj, Mahindra, Piaggio, and a few other legacy players that are ruling the three-wheeler game. 

Even Log9’s partner Omega Seiki has witnessed declining vehicle sales in recent months.

Meanwhile, another industry expert, requesting anonymity, said that most EV financiers in the country are functioning out of FOMO (fear of missing out) with no proper underwriting in place. 

“For the likes of Revfin, Mufin, and such players, their next fundraising is completely dependent on financing green mobility. So, they have to finance. They took their bet, not on Log’s technology, but on the company’s balance sheet – looking at the VC money and runway of a few years,” our source in the EV financing industry added.

There’s also the fact that Log9’s vehicles were already overpriced, possibly to extend the company’s margins, but the battery technology was inherently more expensive. “Financing companies are willing to back expensive vehicles because of technology, but Indian businesses will not overpay just because the technology demands it, especially if other options are available. There was no proper underwriting in place as to what would be the residual value of these vehicles if Log9 defaults one day,” the person quoted above stated.

Currently, vehicles with Log9 batteries manufactured by Omega Seiki and Quantum have been repossessed by financiers that are now running them on lease.  

What’s Next: Revival Or The End?

The big question now is, can Log9 save itself or is this the end of the road for the startup that set the pace in the battery manufacturing space at a time when EVs were an even rarer sight.  

There is speculation among the vendor base that the company will file for bankruptcy given that its assets have been repossessed, but Log9 has denied these allegations. 

The only way to revive the business is to get a funds infusion. 

Cofounder Pankaj Sharma told Inc42 that Log9 has an INR 80 Cr to INR 90 Cr order book in place for its LFP battery packs, which it could execute if the funding comes in.

However, if there is no infusion, the outlook is bleak. The company is likely to go bust with heavy debts on its books, or would be up for a distress sale. 

Sharma further claimed that Log9 is looking for a capital raise from strategic partners, or it might look to divest more business verticals like it did with JEM in 2024.

While many of our sources do not categorise Log9’s downfall as another BluSmart story, some also believe that there were some serious lapses in terms of product quality and customer support, as well as mismanagement of the debt situation by the founders.

The prospects of Log9 making a comeback as a pure-play deeptech company seem increasingly unlikely. Cell manufacturing demands significant capital investment, and even the most deep-pocketed players in India, such as Ola Electric and Reliance, are also facing challenges in getting operations up and running. 

Now the question remains, with all the VC money gone with the wind, will any strategic partner come along to join hands with Log9? Or will the company have to become a middleman in the EV leasing business with no assets and just a sales team to bridge gaps? 

The company insists that its mobility business, which includes providing charging infrastructure, financing, and telematics insights for fleet operators, is still generating revenue. However, this claim could not be verified, casting further doubt on how Log9 is looking at reviving itself. A number of its verticals have failed and its assets have been taken over by financiers.

There is also some inventory of its LTO batteries that Log9 says it is now trying to sell to companies in countries like Canada, Germany, and Switzerland, where these batteries can operate better.

While Log9’s remaining founders are hopeful of a revival, VC investors are currently very soft on valuations, and the chances of a major fund infusion are unlikely. Log9 would also need to clear a lot of its debt with any capital it raises before reviving the business. 

A more realistic outcome for Log9 could be an acquisition by another OEM for the battery tech itself. Distress sales are becoming increasingly common — Ecom Express and Aarzoo are some recent examples of startups being sold for pennies on the dollar.    

And in a market that is growing increasingly stingy and remains challenging for deeptech startups from a growth perspective, will Log9 get another shot?

Edited By Nikhil Subramaniam