Hero MotoCorp Ltd, the country’s largest two-wheeler maker, is making its biggest bet in the electric-vehicle segment after deciding to invest Rs 205 crore ($30.5 million) in Ather Energy Pvt. Ltd.
The investment will give Hero MotoCorp a stake of 26-30% in Bengaluru-based Ather, which had previously raised funding from Flipkart founders Sachin Bansal and Binny Bansal and US hedge fund titan Tiger Global.
Hero MotoCorp chairman Pawan Munjal said in a statement that, in addition to investing in Ather, the company aims to enhance its own electric vehicles programme.
Hero MotoCorp has released Rs 180 crore of the total and will inject the balance amount later.
Ather said it will use the funds to accelerate its infrastructure for product development. “The funding is a strong validation of our product roadmap and technology capability, endorsed by one of the biggest automotive players,” said Tarun Mehta, co-founder and CEO of the company.
Ather was incubated at IIT Madras and founded by the institute’s alumni Tarun Mehta and Swapnil Jain in 2013. The company is testing and finalising vendors for its first product, S340. It has 150 employees. In May last year, it raised Rs 75 crore in a Series A round from Tiger Global.
The deal, which is subject to certain conditions, is also the first time that the Pawan Munjal is backing a direct competitor of Hero Electric, an e-vehicle maker run by his cousin Vijay Munjal.
Hero Electric, part of the group which also makes Hero Cycles, had entered the market around a decade ago in a joint venture with UK-based e-vehicle tech firm Ultra Motors. It later scrapped its JV and bought Ultra out.
Apart from Ather, a few other electric two-wheeler makers have also raised funding in India over the past couple of years.
In April, electric bike startup Tork raised angel funding from a group of investors led by Bhavish Aggarwal and Ankit Bhati, co-founders of cab aggregator Ola.
In May, electric bike company Ampere Vehicles Pvt. Ltd raised funding from Infosys co-founder and former CEO Kris Gopalakrishnan and Venk Krishnan, CEO of NuWare. The duo along with Vineet Agarwal, managing director at Transport Corporation of India, and former Wipro executive Sudip Nandy last year invested $1.2 million in Ampere. The company also got the backing of Ratan Tata in July last year.
Another player is YO Bykes, run by Mumbai-listed firm Electrotherm.
Mahindra Group has a US-based venture Genze involved in electric two-wheelers, which is separate from Mahindra Two Wheelers. Mahindra Group also sells electric cars through Mahindra Reva Electric Vehicles.
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