Ather Energy Enters Unicorn Club with $71 Million Investment from NIIF

Electric scooter manufacturer Ather Energy has reached a significant milestone, joining the elite unicorn club following a substantial funding boost. The company has secured Rs 600 crore ($71 million) from its existing investor, National Investment and Infrastructure Fund (NIIF), catapulting its valuation to an impressive $1.3 billion (approximately Rs 10,900 crore). This achievement marks Ather as India's fourth unicorn of the year and the second in the mobility sector, following Rapido's $120-million funding round.

Ather Energy's Funding Boost: What It Means for the Electric Scooter Market

Ather Energy's latest funding round has solidified its position in the electric vehicle (EV) landscape. Since NIIF first invested in Ather in May 2022, the company's valuation has nearly doubled from around $740-750 million to its current status of $1.3 billion. This boost is particularly notable as Hero MotoCorp, Ather's largest shareholder with a 40% stake, had previously valued the company at $671 million during a secondary transaction in June.

The new funding arrives as Ather navigates a competitive market. Ola Electric, Ather's larger rival, has seen its stock hit the upper circuit in consecutive trading sessions, reflecting growing investor confidence in the EV sector. As of Monday, Ola Electric's market capitalization stands at Rs 48,258.89 crore ($5.7 billion), up from its previous valuation of $5.4 billion.

The Competitive Landscape: Ather vs. Ola and the Big Picture

Despite Ather's recent success, the company still trails behind key players in the electric scooter market. With a market share of approximately 9% as of last month, Ather is positioned behind market leaders Ola Electric (39%), TVS (18%), and Bajaj Auto (16%). Ather's newest model, the Rizta, is expected to enhance its presence in the family scooter segment, a space currently dominated by Ola. The company plans to utilize its third manufacturing plant in Aurangabad to meet the growing demand in western and northern India.

Funding and Future Plans: Ather's Strategic Moves

Ather's latest round of funding, which included significant contributions from NIIF, follows a period of strategic maneuvering. Earlier this year, Ather had raised Rs 286 crore ($34 million) in a mix of debt and equity funding at a lower valuation. This was also the time when Flipkart founder Sachin Bansal exited the company, selling his stake to Zerodha founder Nikhil Kamath.

In late June, Ather Energy transitioned into a public limited company, signaling potential plans for a public listing in the near future. Despite a 22% increase in losses to Rs 1,059 crore for fiscal 2024, the company's revenue remained steady at around Rs 1,789 crore. The firm is focusing on expanding its market share and strengthening its position in the highly competitive EV sector.

A Glimpse into the Future: What’s Next for Ather Energy

Ather Energy's ascension to unicorn status underscores a broader trend of growing investor interest in the electric vehicle sector. While new unicorns have become rare since the record-setting funding cycle of 2021, Ather’s success highlights the ongoing potential in the mobility space.

As the company continues to innovate and expand, particularly with the launch of the Rizta and the establishment of its new manufacturing facility, Ather Energy is poised to make significant strides in the electric scooter market. Investors and industry watchers will be keenly observing the company’s progress and its ability to capitalize on the burgeoning EV market.