Three years after US-based venture capital investor Tiger Global invested in Ather Energy Pvt. Ltd, the Bengaluru-based startup has rolled out two electric scooters designed indigenously from scratch.
The much-delayed commercial launch of the Ather 450 and the previously unveiled variant Ather 340 marks a milestone in India’s nascent market for electric two-wheelers that research firm Frost & Sullivan estimates will grow 38% by 2020 and account for nearly 60% of the total electric vehicles market.
Ather Energy was founded in 2013 by IIT graduates Tarun Mehta and Swapnil Jain. It had initially aimed to launch the electric scooters in 2016 but faced delays because product testing took longer than anticipated.
The startup has thus far raised around $43 million from the likes of two-wheeler major Hero MotoCorp Ltd, Flipkart founders Sachin Bansal and Binny Bansal and Tiger Global.
It had secured about Rs 75 crore ($12 million) in funding from Tiger Global in early 2015. In October 2016, Hero MotoCorp Ltd, the country’s largest two-wheeler maker, decided to invest as much as Rs 205 crore ($30.5 million) in Ather Energy for a stake of 26-30%.
The company is now looking to raise fresh capital and has hired an investment banker to arrange the fundraising, VCCircle reported last month.
To be sure, Ather isn’t the only one looking to tap into the growing market for electric vehicles. A number of other startups have also forayed into the segment and raised funding from angel investors as well as two-wheeler companies.
Electric bike maker Ampere Vehicles Pvt. Ltd has raised funding from Infosys co-founder Kris Gopalakrishnan and Ratan Tata, chairman emeritus at Tata Sons. Another electric two-wheeler startup is Ultraviolette Automotive Pvt. Ltd, which is backed by Hero MotoCorp rival TVS Motor.
Tork Motorcycles, which is building an electric motorcycle, has raised angel funding from Bhavish Aggarwal and Ankit Bhati, co-founders of cab aggregator Ola. Bangalore-based Emflux Motors Pvt. Ltd has secured angel funding to make what it touts as India’s first electric sports bike.
Ather is touting the scooters’ ‘intelligent’ features as differentiators from rival products. These features include parking assistance, remote diagnostics and onboard navigation.
However, all electric vehicle makers face a common problem—lack of adequate infrastructure for charging.
Ather co-founder and CEO Mehta said that, apart from the two scooters, the company is setting up the AtherGrid public infrastructure in Bengaluru for riders to charge their scooters. The company plans to expand into Chennai and Pune in the coming months, he added.
High cost is another challenge. The Ather 450 is priced at Rs 1,24,750 and the Ather 340 is priced at Rs 1,09,750, after including all taxes, insurance and registration. That’s more than twice the price of most scooters in India.