The funding from Dukosi provides an endorsement of the vision of Stephen Churcher who died in a cycle accident in August aged 46.
The Par Equity venture capital firm and the Scottish Investment Bank provided the funding to support the launch of a smart computer chip Dukosi believes could tackle perceived drawbacks to the use of electric vehicles. Wider adoption of electric vehicles may help reduce carbon emissions.
Edinburgh-based Dukosi said its Electric Vehicle Optimisation Integrated Circuit significantly extends the range of a vehicle from a single charge.
The company noted: "In addition, it manages how the batteries are charged and discharged in such a way that their useful lifetime is lengthened. The technology also greatly enhances the reuse and recyclability of used vehicle batteries."
The plans for the launch have been developed under chief executive Gordon Povey, who joined Dukosi in January.
He said: "The market for electric vehicles is now really taking off, especially in the Far East but also in the USA and now Europe. This is a great opportunity for us."
Dukosi said several electric vehicle manufacturers are interested in trialling the EVoIC system.
The company is hiring technical and commercial staff and plans to have the EVoIC system ready for customer trials in the second half of 2014.
It expects the chip to be ready for volume production during 2015. Kerry Sharp, head of the Scottish Investment Bank, said: "Dukosi is a great example of a company exploiting the benefits of the transition to the low carbon economy, with a product with an international market."
Dukosi was founded 10 years ago by Mr Churcher, who described himself on his Twitter page as "Entrepreneur, parent, Grand Canyon kayaker, performance improvement enthusiast, lover of wild places, adventure sports and good food".
Mr Churcher specialised in integrated circuits after graduating from the University of Edinburgh with first class honours in Electrical and Electronic Engineering in 1989.