India’s electric bike startup just raised $31m from two-wheeler giant Hero

The Ather S340. Photo credit: Ather Energy.

Ather Energy, India’s potential two-wheeled answer to Tesla, is raising US$31 million in fresh funds from two-wheeler king Hero MotoCorp, the world’s largest seller of motorcycles and scooters, the companies said on Thursday.

Hero will get to own as much as 30 percent in the Bangalore-based startup through the investment. The money is to come in tranches, and Ather has received about US$27 million of the entire amount so far.

The move is significant, as it shows India’s traditional automobile companies are swiftly learning the potential of green vehicles. The country so far has had very little success with them. Hero itself had launched its Hero Electric range years ago, but things haven’t gone so well.

See: India hasn’t found its own Tesla. Ather offers a two-wheeled solution.

“As the market leader and a global automotive major, Hero MotoCorp takes the lead in many areas that benefit the environment, customer, and the industry. Adoption of environment-friendly fuel is a priority for Hero MotoCorp, as is propagating sustainable manufacturing through green facilities,” Pawan Munjal, CEO of Hero MotoCorp said in a statement.

As for Ather, the money comes in at an important time. Ather is building its ambitious S340, the scooter that is expected to change Indians’ perception of electric vehicles.

The money will be used by Ather to fuel its upcoming launch and to accelerate its infrastructure and ecosystem development. The team of 150 are currently testing their product and finalizing vendors.

Ather is planning to launch in the motocycle-heavy cities of Bangalore, Chennai, and Pune, targeting sales of 10,000 units in the first year.

Ather’s other investors include Flipkart founders Sachin and Binny Bansal, who gave them seed capital, and Tiger Global, from which the company raised US$12 million in May 2015.