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Ather leads the pack as EV startups raise $63.5 million so far this year

Ather alone accounts for $35 million. During 2019, the electric two-wheeler startups collectively raised nearly $100 million, which was 19 percent less than the $123 million in 2018, the best year for the industry.

November 18, 2020 / 10:26 AM IST
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Despite uncertainty clouding their future, thanks to the pandemic, two-wheeler startups in the electric vehicle (EV) space have managed to collectively raise more than $63.5 million this year.

According to data collated by Praxis Global Alliance, a global management consulting and advisory firm, electric two-wheeler startups raised $28.5 million between January and September 2020.

The aggregate got a further boost of $35 million a few days ago when the Hero MotoCorp-promoted scooter maker Ather Energy announced the successful completion of their funding-raising programme.

TVS Motor Company-backed Ultraviolette Automotive, which is building a high- performance premium electric motorcycle, raised capital in October but the company declined to provide the transaction details.

Speaking to Moneycontrol, Sanjeev Garg, Practice Leader – Automotive, Praxis Global Alliance, said: “There are lots of entrepreneurial focus on electric two- and three-wheelers at present. Ather Energy is the company which has raised the bulk of funds from the electric two-wheeler category, followed by Ampere Vehicles”.


During 2019, the electric two-wheeler startups collectively raised nearly $100 million, which was 19 percent less than the $123 million in 2018, the best year for the industry. Little over 40 percent of the entire $288 million raised by electric two-wheeler startups since 2016 was raised by Ather Energy alone, as per the Praxis data.

Since most companies have already gone through their funding rounds, there are little chances of further fund-raisings before the end of December, said a senior executive of a company, which tracks startup companies.

Over the past few years, startups have attracted investments from not just financial investors like venture capital firms and private equity companies but from large automotive companies such as Bajaj Auto, TVS Motor Company, Hero MotoCorp, Greaves Cotton and Bharat Forge.

Bajaj Auto invested in Bengaluru-based electric scooter rental startup Yulu Bikes, while Bharat Forge made a series of investments in Tork Motors, one of India’s first electric bike makers. Engine maker Greaves Cotton fully bought out Ampere Vehicles, whereas two-wheeler leader Hero MotoCorp made multiple investments in Ather Energy.

How did they attract investments?

According to Garg, despite COVID-19, the valuations of these EV startups have only increased, leading to multiple increases on their returns. This has made the sector attractive for investments.

“Return on funds have gone down in every investment -- be it real estate or financial markets. But investors need to invest somewhere and so the EV startup segment has become attractive as they have given thrice to 10-fold returns. Most businesses are now back to normal and now it all boils down to how the next 6-8 months period shape up. These startups have to perform as per their plans. If they are able to achieve those plans well, they will attract more investments in near future,” added Garg.

Ather became the only exception to the soaring valuation story when Hero MotoCorp picked up an additional stake for Rs 84 crore at a lower valuation during the middle of the lockdown phase. However, Hero participated in the new funding round of Ather, which concluded in the first week of November with an investment of $12 million.

As per data shared by the Society of Manufacturers of Electric Vehicles (SMEV), sales of high-speed electric two-wheelers in India fell by nearly 27 percent to 7,552 units between April-September as compared to 10,161 units. The fall was largely attributed to COVID-19-induced lockdowns.

The sales outlook as predicted by SMEV remains positive, thanks to improving retail sales and the government’s move, allowing registration of electric two-wheelers without batteries.

Swaraj Baggonkar
first published: Nov 18, 2020 10:26 am

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