Bengaluru-based electric mobility start-up, Ather Energy has announced a fresh investment of ₹ 84 crore ($11 million) by Hero MotoCorp, as an extension of its Series C round of funding that was led by Sachin Bansal. The new investment increases Hero's stake in Ather to 34.58 per cent, up from the previous 31.27 per cent. The world's largest two-wheeler maker had originally announced an investment ₹ 205 crore in 2016 in the start-up, when the company first invested as a part of a Series B round of funding. The fresh investment is part of the ₹ 130 crore that Ather Energy plans to raise in five years, as the company expands its dealership network, export operations and charging infrastructure.
Speaking on the fresh funding, Tarun Mehta, Co-founder & CEO, Ather Energy said, "We are in a high growth phase of our journey, and while the last few months have been challenging, we have not altered our expansion plans. Our geographic expansion and the roll-out schedule for the Ather 450X are on track, and we will be using these funds to invest in our facilities to meet the demand we have seen for the Ather 450X across the country. "
Commenting on the investment, Rajat Bhargava, Head of Emerging Mobility Business Unit (EMBU), Global Business & Strategy, Hero MotoCorp, said, "We are excited to see the growth of Ather Energy in the recent years. We see immense potential for them to expand their market even further, especially given the likely growth of electric vehicles (EV) in the near future. In addition to our efforts of developing a robust external eco-system for EVs, we are also aggressively working on our internal EV program. Our aim is to provide accessible electric mobility to customers across the globe. Sustainability and a clean, green environment remain central to our vision to be the future of mobility."
Hero MotoCorp originally announced its investment in 2016 that was released in tranches to the firm. After the part investment in 2016, Hero released the final $2.5 million of the original investment in January this year. The company converted its convertible debt of $19 million last year as part of the Series C funding that saw Ather raise $51 million led by Sachin Bansal's $32 million, his second in the EV maker, along with an $8 million venture debt by InnoVen Capital.
The IIT-Madras incubated start-up has been raising funds since 2014. It first received funding from IIT Madras and Srini V Srinivasan, IIT alumnus and Aerospike founder to the tune of $4.5 million. The company then went on to secure funding from Tiger Global Management of $12 million, while Flipkart founders Sachin Bansal and Binny Bansal had collectively invested $1 million.
The announcement comes at a time when the market is going through uncertainty due to the pandemic. However, it does reinforce that electric mobility has a promising future. The funding is also expected to help Ather Energy expand more aggressively as the company is readying its new flagship offering, the Ather 450X, for deliveries from October 2020 onwards. Ather will soon open its first Experience Centre in Hyderabad, expanding its presence beyond Bengaluru and Chennai. The company has already announced that it will open dealerships in Pune, Delhi and Mumbai next. The start-up plans to expand to 20 cities by 2021.
Ather also plans to open a new manufacturing facility in Hosur, Tamil Nadu. The plant will have an installed production capacity of 100,000 units and is scalable to 500,000 units per annum. The electric mobility start-up is also working on setting more fast charging points across the country over the next five years. The company currently retails the entry-level Ather 450 that is priced at ₹ 1.13 lakh (on-road, Bengaluru), while bookings are open for the Ather 450X Plus and Ather 450X priced at ₹ 1.49 lakh and ₹ 1.59 lakh (ex-showroom, Bengaluru) respectively. The scooters can also be purchased via the company's lease programs with plans starting at ₹ 2589 per month. More recently, Ather rolled out its seventh OTA update for the 450 e-scooter.