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Ather Energy to raise series D funding post July

The company has so far raised about $100 million (Rs 714 crore) through equity with Hero MotoCorp being its largest investor with a 31% stake. It has also raised an additional $20 million through debt.

, ET Bureau|
Last Updated: Feb 13, 2020, 10.58 AM IST
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The company currently has sales operations in Bengaluru and Chennai and recently announced its plan to enter 4 new cities by July this year. Further, it plans to have presence in 10 cities by end of this year, and 24 by end of the next year.
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MUMBAI: Electric two-wheeler maker Ather Energy will be looking to raise capital as part of its series D round of funding post July this year as the company prepares to start operations in a couple dozen new cities.

The company has so far raised about $100 million (Rs 714 crore) through equity with Hero MotoCorp being its largest investor with a 31% stake. It has also raised an additional $20 million through debt.

"(As a startup) you stop money raising money when you become profitable and it's going to be some time before that happens,” said Tarun Mehta, co-founder and chief executive of Ather Energy. “I think we'll go out and raise money once the 450X is out on the road (in July). Till then we'll wait.”

Mehta aims for Ather to be ebit-positive (earnings before interest and tax) in the next couple of years.

The company recently announced its updated product 450X, which will be up for sale from July this year and have a substantial price increase over the outgoing model. The new price will ensure that the product is contribution margin positive, Mehta said, adding that the company was losing money when selling it at Rs 1.13 lakh.

The 450X will be sold in two variants priced at Rs 1.49 lakh and Rs 1.59 lakh on-road, inclusive of government subsidies.

The company currently has sales operations in Bengaluru and Chennai and recently announced its plan to enter 4 new cities by July this year. Further, it plans to have presence in 10 cities by end of this year, and 24 by end of the next year.

Funds raised in the future will be utilised mainly for this operations expansion, unlike in the past when research and development accounted for a lion’s share of the capital expenditure, Mehta said.

To support the increased demand, the company is moving its manufacturing operations from Bengaluru to a larger plant in Hosur, Tamil Nadu. The new plant will have a capacity to make 100,000 units in two shifts at the beginning and it could be ramped up to half a million units as demand rises, according to Mehta.

Aiding confidence to his plans is the fact that Ather 450X has received more pre-orders so far than the total sales of the 450 in 2019.

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