Exclusive: Ather raises Rs 260 Cr from Sachin Bansal and Hero MotoCorp

Electric scooter manufacturer Ather Energy has raised Rs 260 crore in its Series D round led by Sachin Bansal. Existing investor, Hero MotoCorp has picked up preference shares worth Rs 90 crore in the EV maker. Bansal, who has been backing the Bengaluru-based venture since 2014, is leading the Series D round with Rs 170 crore infusion. 

Importantly, this would be a down round for Ather with over 10% haircut in valuation. The company is allotting 88,040 Series D preference shares at an issue price of Rs 29,532 per share to raise an aggregate amount of Rs 260 crore, regulatory filings show.

This is the first equity investment from Bansal in 2020 who has bet most of his fortune on consumer fintech platform Navi. He led Ather’s $51 million Series C round with an investment of $32 million in July last year. 

The Series D financing appears to be an ongoing one and it could raise more money.

With the new round, the company’s total funding would reach $140 million. Post allotment, Hero MotorCorp would emerge as the largest stakeholder in Ather. The two-wheeler major will have a 37.84% stake in the company, followed by Sachin Bansal who would own 20.69%. 

Tiger Global would leave with 15.93% stake in the Tarun Mehta-led firm. The hedge fund is likely to participate in the fresh round. Its co-founders Mehta and Swapnil Jain own 9.43% each while Binny Bansal holds 2.3% stake in the company. It’s worth noting that Binny Bansal didn’t invest in Ather after its seed financing that materialised in 2014.

Other stakeholders have collective ownership of 4.38% in the seven-years-old company.

Significantly, the price per share of Ather would drop by 27.3% to Rs 29,532 per share from Rs 40,602 per share when it raised Rs 84 crore from Hero MotorCorp in July, this year. The valuation of the company is also taking a haircut of 10.6%. 

Fintrackr’s estimates show that the company’s valuation will be reduced to Rs 1,405 crore in the fresh round from 1,572 crore in the last tranche of the Series C financing.

Ather had rolled out the first batches of scooter 450X in 2018 at a price tag of Rs 1.25 lakh. However, the company upgraded the previous version and increased the price to achieve break-even in 2020. To reduce the cost of its scooters and drive adoption, the company rolled out a subscription program with guaranty to buy-back after three years at Rs 85,000 in a few cities.

In terms of financial performance, Ather has to cover a lot of ground and spend significant capital to build its brand and infrastructure as an EV manufacturer in India. Ather reported a loss of Rs 220 crore in FY20 while its operating revenue jumped 8.4X to Rs 35.3 crore during the same period from Rs 4.2 crore in FY19 as scooter sales went up.

But to achieve the growth in scale, the company has incessantly burnt cash in FY20. This could be evident from Ather's 2.3X surge in expenses that went up to Rs 268.7 crore in the last fiscal from Rs 107.5 crore in FY19.

Update: We have changed the headline and story after getting inputs from Ather's press release