Hero MotoCorp has invested $56 million or roughly ₹420 crore in this round, with the rest of the investment primarily coming from NIIF. Other existing investors in the company, including angel founders, also supported the round through minor investments.
However, even after this latest fundraise round, Ather Energy's valuation is still shy of $1 billion. "The EV industry has changed dramatically over the last two years and we need to invest to fuel growth a little ahead of time now. We will need to raise more capital and I see a capital raise once again in the next two years. Given our pace of growth, we want to stay ahead of the curve and will need to raise more money", Tarun Mehta, co-founder & CEO Ather Energy told Mint.
"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 told Mint.
Mehta added that the NIIF investment is a major shot in the arm for the company, as the sovereign's fund's maiden investment into new-age manufacturing.
"We were keen to get NIIF on-board for the longest time and are very happy with the quantum of their investment too. Being a sovereign fund, they are far more patient, understand long-term value creation and are driven by more secular trends", Mehta said, adding that he is confident NIIF will also support Ather Energy in its future fundraise rounds.
Hero MotoCorp will own 35% stake in Ather Energy on a fully diluted basis, after this round of fundraise.
Mehta said that Ather will use this investment to scale up production capacity at its second manufacturing plant, which is expected to go on-stream in a "few months from now", and have a production capacity of 35,000 units a month. Ather's existing production facility has a monthly production wherewithal of only 10,000 units a month, whereas demand for Ather's scooters is already in excess of 10,000 scooters a month, Mehta said.
A significant part of the investment Ather has raised will be utilized towards capacity building at the supply-chain level. "We buy very few components off-the-shelf. We are investing significantly into scaling up not our own capacity, but in scaling up our supply chain as we require a lot of custom-designed parts, custom tooling. This capacity needs to go upto 1 lakh a month", Mehta told Mint.
He added that a "realistic" estimate of being able to attain a capacity of 1 lakh/month capacity is before the end of next year, "which is still 18 months out". Mehta expects demand to reach 35,000-40,000 units a year by the end of the year.
Ather Energy is also looking to expand its footprint of experience centres to 100 showrooms by the festive season this year. Mehta expects Ather to achieve 10,000 units in sales a month by this time, up from a current run-rate of nearly 4,000 vehicles a month.
Additionally, Ather is also going to invest in building new vehicle and engineering platforms. This year, Ather Energy will focus on bringing out "scooter platforms beyond the Ather 450X." Ather's 450X is the company's flagship scooter.
Mehta, however, clarified that a new motorcycle platform is not in the works yet, at least until this year.
