TVS Motor Company Ltd has acquired a 14.78% stake in electric bike maker Ultraviolette Automotive Pvt. Ltd for Rs 5 crore ($775,000) in cash, signifying growing interest of major vehicle manufacturers to partner with startups in the transportation technology segment.
TVS acquired 6,750 shares of the Bangalore startup at Rs 7,409 apiece, the Chennai-based two-wheeler maker informed the stock exchanges.
Ultraviolette was co-founded by Narayan Subramaniam and Niraj Rajmohan three years ago and was incorporated in December 2015. The company has designed and developed a couple of battery-powered bikes and is planning to commercially launch them soon.
“We are in the product development phase and will have further updates on the vehicle/s and specifications when we are closer to launch,†said Subramaniam, who is also the CEO.
He did not divulge any details on the products, saying only that the company “will have specific updates on the launch once it is ready with the final productâ€.
The TVS’ filing with the stock exchanges shows that Ultraviolette made revenue of Rs 3, 21,386 for the financial year 2016-17 and Rs 31,570 for 2015-16.
TVS follows larger rival Hero MotoCorp Ltd in acquiring a stake in an electric two-wheeler startup. Hero MotoCorp had last year put in $30.5 million in electric two-wheeler maker Ather Energy.
While TVS and Hero MotoCorp have invested in electric two-wheeler makers, big automakers such as Ford Motor, Tata Motors and Mahindra & Mahindra have made strategic investments in new-age transportation technology companies.
Ford had last year led a $24 million Series D round in Zoomcar while Mahindra & Mahindra is also in talks to invest in the self-drive car rental company.
Tata Motors subsidiary Jaguar Land Rover picked up a stake in US ride-sharing startup Lyft earlier this year. Tata Motors has also rolled out its electric car Tigor this week.