Other Energy Funding: Ather Energy raises $ 128 million led by the Indian government’s sovereign wealth fund, Hero MotoCorp

Bangalore: Electric scooter manufacturer Ether Energy claimed to have raised $ 128 million led by the National Investment and Infrastructure Fund (NIIF), the sovereign wealth fund of the Indian government and an existing investor Hero Moto Corp.

Hero MotoCorp had announced it
investment of Rs 420 crore (approximately $ 54 million) in Ather in January.

Tarun Mehta, co-founder and CEO of Ather Energy, told ETtech that the funds will be used to expand its manufacturing facilities, invest in research and development and its charging infrastructure, and grow its retail network.

“Most of the investment will go into investing in capacity, not just our capacity, but also that of the supply chain so that it can scale quickly,” he said. “Overall our components are quite unique, so we need to make sure our suppliers can invest for us. So a lot of capacity will go into that. ”Mehta didn’t disclose Ather’s valuation, but said the company has yet to reach $ 1 billion worth. Its competitor Ola Electric is worth over $ 5. billions.

“Ather is still considerably undervalued… People are starting to discover real value gradually… In a way, I take responsibility for that. As founders, around Covid-19 or shortly before Covid we focused so much on the operations and repair of the nuts and bolts of this business that we decided we didn’t want to raise more capital, “he said.” But now we hear from you. as if we underfunded the business. I don’t completely regret it because some of the hunger has led to ridiculous efficiencies and very high quality decisions. ”

The deal also marks Ather’s first funding from an institutional investor since Tiger Global in 2015. The company is preparing for an IPO.

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“Ather Energy has designed and developed products in-house with a high degree of in-house component sourcing and adaptability to Indian conditions,” said Padmanabha Sinha, executive director and chief investment officer for equity growth at NIIF. “We are thrilled to partner with Ather Energy’s founders and management team who have developed deep industry experience, developed a strong intellectual property portfolio and built strong manufacturing and distribution capabilities.”

Ather’s new funding round comes at a difficult time for India’s electric two-wheeler industry.
More than two dozen electric scooters caught fire since March and companies such as Ola Electric, Pure EV and Okinawa have claimed
they will recall over 7,000 vehicles between them. But Mehta says these incidents haven’t dampened Ather’s sales.

It said that demand has increased by 30-35% since the end of February, and the company expects demand to increase by around 100% over the next five months. Ather recorded its highest monthly sales ever in April 2022, delivering 3,779 units to customers. Booking orders for Ather’s flagship product, the Ather 450X, are growing 25% quarterly.

“There are more than 10,000 orders coming in every month,” Mehta said. “So the demand is very high and it has continued to grow even during this dark enough chapter for the electric vehicle industry.”

Mehta said Ather’s biggest selling point is quality, adding, “I think a lot of competition has helped to confirm that.”

He said the company has already achieved a large margin of 25% and plans to increase the number of stores from 38 to 100 by October. He also said the company would venture into other segments.

“We have been extremely focused over the past few years. We’ve cut down on every single program that wasn’t directly relevant to supporting the Ather 450, “said Mehta.” With this investment we will focus on programs that have been in cold storage for some time. ”

Hero is the largest investor in Ather with a stake of around 35%, having invested for the first time in 2016. But Mehta said Ather will continue to remain independent and that all of its shareholders are aligned with the goal of a initial public offering (IPO) in the “not so distant future”.

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