Electric scooter maker Ather Energy Pvt. Ltd has raised Rs 84 crore ($11.21 million) from existing backer Hero MotoCorp Ltd as an extension of its Series C funding round.
Hero MotoCorp, India’s largest maker of two-wheelers, said in a statement the fresh investment will increase its stake in the startup to 38.57% from 34.58%.
Ather said in a separate statement that the capital infusion is part of the Series C round in which it had raised $51 million (around Rs 354 crore) last year. That round was led by Flipkart co-founder Sachin Bansal, who invested $32 million. Hero MotoCorp, which had invested $19 million in Ather Energy in the form of compulsorily convertible debentures in July 2018, converted the debt into equity as part of that round.
Hero MotoCorp had initially invested in the electric vehicle (EV) manufacturer during its Series B round in 2016. Its first investment in Ather Energy had given it a stake of 26-30% in the Bengaluru-based startup.
Ather Energy, which was founded in 2013 by IIT graduates Tarun Mehta and Swapnil Jain, will launch its Ather 450X in the fourth quarter of this year, and is looking to be present in 20 cities by the end of next year.
Mehta said the company will use the funds it has raised to invest in its facilities and meet the demand for its product. “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,” he added.
Separately, Hero MotoCorp head of emerging mobility business unit Rajat Bhargava said the company was confident of its latest commitment to Ather
Energy owing to the growth of the EV segment.
Ather Energy is also opening a new manufacturing facility in Hosur, Tamil Nadu. The factory will be able to produce one lakh units annually and be scalable to five lakh units. It will also set up charging grid points over the country in the next five years to make EV infrastructure accessible.
Before Hero MotoCorp, it had secured about Rs 75 crore ($12 million) in funding from US-based investor Tiger Global in early 2015.
Hero MotoCorp, meanwhile, is among the handful of traditional manufacturing companies making bets on EV makers. TVS Motor has invested in
Ultraviolette Automotive Pvt Ltd, for example.
Earlier this month, engineering company Greaves Cotton Ltd acquired its second EV maker. In August 2018, Mumbai-based Greaves Cotton had acquired electric two-wheeler maker Ampere from a bunch of investors including Tata Sons chairman emeritus Ratan Tata and Infosys co-founder Kris Gopalakrishnan.