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Of all the EV startups, why is Ather Energy's valuation down?

Fresh round of fund-raisings by startup automobile companies, backed by big brands, indicate a surge in their valuations though profitability remains a distant possibility. Here’s a look at such companies.

September 30, 2020 / 10:16 AM IST
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Investments made by Bharat Forge, Bajaj Auto, TVS Motor Company and Greaves Cotton, over the last few years, in Electric Vehicle (EV) startups have seen an upward revision in their valuations.

Ironically though, Ather Energy, backed by Hero MotoCorp, is the only startup to have seen a dip in valuation.

The dip in valuation is beyond comprehension, especially when seen against the fact that Ather is the only EV startup to have a product in the market.

Which are the other companies?

Bengaluru-based Ultraviolette Automotive is another firm. Founded in 2015, the startup is engaged in building what it defines as ‘India’s fastest electric motorcycle’, christened F77. The company is backed by TVS Motor Company and has done multiple fundraisings in the last five years.

Though the commercial launch of the F77, which is also its first product launch, is slated for 2021, Ultraviolette’s valuation has seen a spike. From a mere Rs 35 crore in 2017 when TVS made its maiden stake-buy in Ultraviolette, the startup’s valuation has increased to a whopping Rs 805 crore as of September first week when TVS increased its stake to 29.48 percent, with an infusion of Rs 30 crore.


Ultraviolette is estimated to have incurred a loss of Rs 2.6 crore for FY20, based on TVS’s share of Rs 67 lakh.

Tork, Yulu, Ampere… all tell the same story

Incorporated in 2015, Pune-based startup Tork Motors is yet to launch its first all-electric product but the valuation of the Bharat Forge-backed company is at Rs 113 crore. The Pune-based forging company has steadily raised its stake in Tork to nearly 49 percent over the last few years.

Tork had committed to launch its maiden product T6X – a fully electric motorcycle – in 2016 itself, but due to unspecified reasons, the launch is yet to happen. Meanwhile, Tork has ratcheted up a loss of around Rs 11 crore by end of March 2020 as per details shared by the annual report of Bharat Forge.

Bengaluru-based bicycle and electric scooter rental startup Yulu Bikes, which focuses on sub-5 km first and last-mile connectivity, has seen its valuation surge nearly 77 percent in less than a year. Bajaj Auto bought a 16.67 percent stake (as per Entrackr) for Rs 55 crore in Yulu in November 2019. valuing the company at Rs 330 crore.

The Series A2 fundraising done a few months ago saw Yulu’s valuation increase to Rs 585 crore after venture capital fund bought 3.84 percent in the company for Rs 22.5 crore. As per Entrackr, the annualised loss reported by Yulu Bikes for FY20 was Rs 27.5 crore.

Engine manufacturer Greaves Cotton acquired a 67 percent stake in the 10 year-old, Ratan Tata-backed start-up Ampere Vehicles in 2018 for Rs 77 crore, thereby giving it a valuation of Rs 115 crore. After having bought the remaining stake, Ampere’s valuation shot up to Rs 325 crore in less than 18 months.

Ampere Vehicle recorded a loss of 21.33 crore during FY20 on revenues of Rs 90 crore, as per disclosures made by Greaves Cotton in its FY20 annual report.

Ather Energy an exception

The only exception to this trend is Ather Energy, the premium scooter manufacturer, backed by Hero MotoCorp, whose valuation saw a correction. After a fund infusion of Rs 84 crore by Hero a few months ago, the Delhi-based two-wheeler heavyweight increased its stake in the startup by 3.31 percent to 34.58 percent on a fully diluted basis.

This transaction gave Ather a valuation of little under Rs 2,550 crore.

In 2019, when Ather raised $51 million from a clutch of investors, the deal valued the company at Rs 2,800 crore. A senior executive from Ather admitted that the valuation underwent a correction.

Tarun Mehta, co-founder, Ather Energy, said: “We did raise cash at a lower valuation than the last round. The rationale for this is simple. We are in the middle of a massive expansion of business where the new plant will start operations in October. We are adding new cities and are launching a new product. The fundraising was done in April when the COVID-19 disruption was at its peak and that is what has led to the lower valuation”.
Swaraj Baggonkar
first published: Sep 30, 2020 10:16 am
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