Bengaluru-based electric two-wheeler company Ather Energy has raised $128 million in its latest funding round led by sovereign wealth fund National Infrastructure Investment Fund (NIIF) and existing backer Hero MotoCorp.
Hero MotoCorp has invested $56 million or roughly Rs 420 crore in this round, with the rest of the investment primarily having come from NIIF. Other existing investors in the company, including angel founders, also supported the round through minor investments.
The investment is also an important move for NIIF, as it marks the infrastructure-focussed fund's first foray into investing in the manufacturing sector in India.
However, even after this latest fundraise round, Ather Energy's valuations are still shy of $1 billion.
Tarun Mehta, Co-Founder & CEO Ather Energy told Mint the company's valuation is "still playing catch-up" and is "not a unicorn yet". However, Mehta says the NIIF investment is a major shot in the arm for the company, as the sovereign's fund's maiden investment into manufacturing is also India's first design-led electric-two-wheeler maker.
"I believe there is a lot more value in the company. We did our last round of funding at quite a discount because of Covid-19, so we have a lot of upside left for our investors", Mehta said in an interview with Mint.
Hero MotoCorp will own 35% stake in Ather Energy on a fully diluted basis, after this round of fundraise.
"The current round of investment will help us enhance capacities across the board, bring additional focus on new platforms, expand into new geographies, expand our fast-charging network and double down on the reputation we’ve built for making a product that’s high on quality," Mehta added in a statement.
NIIF said this is its first direct investment in the manufacturing sector and in electric mobility, which is an area of focus for the Indian sovereign fund, given its importance to India’s green mission and decarbonisation goals.
“Aligned to India’s green transition mission, the electric two-wheeler industry is expected to grow significantly in the coming years. Ather Energy has indigenously designed and developed products with a high degree of domestic sourcing of components and adaptability to Indian conditions," Padmanabh Sinha, executive director and chief investment officer, NIIFL said.
The investment enables NIIFL to play a role in mainstreaming the electric 2-wheeler sector in India at an early stage of development and to support first generation local entrepreneurs in building a new product with a high level of indigenisation, NIIF said. This will be the Strategic Opportunities Fund's fourth investment following its investments in two infrastructure financing NBFC firms Aseem Infrastructure Finance and NIIF IFL and its investment last year in healthcare chain Manipal Hospitals.
