Even as Ola Electric has had a stellar debut at the stock markets, its arch-rival has seen its private valuation rise above the $1 billion mark.
Ather Energy has become India’s latest unicorn after closing a $71 million (Rs. 600 crore) funding round from from existing investor National Investment and Infrastructure Fund (NIIF). The round values Ather at $1.3 billion (Rs. 10,900 crore). The fundraise turns Ather into India’s fifth unicorn of 2024 behind after Krutrim, Perfois, Porter and Rapido.
Ather was founded in 2013 by IIT Madras graduates Tarun Mehta and Swapnil Jain. The duo had been tinkering with automotives in college, and formally incorporated Ather Energy a year after graduating. Ather found some prominent early backers, including Flipkart co-founder Sachin Bansal, who at one point owned 10 percent of the company. Tiger Global invested into the company in 2015, while two-wheeler giant Hero Motocorp backed it in 2016.
In 2018, Ather launched its first electric scooters, the Ather 340 and the Ather 450. Ather’s scooter was priced at northwards of Rs 1 lakh, but managed to find itself some customers who were quite passionate about the product. The company, though, was slow in getting its scooters to the masses, which is something Ola Electric capitalized on — after being founded in four years after Ather in 2017, Ola’s first scooters were available for sale in 2021, and the company launched them with a marketing blitz –which included slick launch events and rap videos — that took them to the masses. The buzz paid off, and Ola Electric was able to attain a $5 billion valuation before having sold a single scooter.
This led to some consternation among Ather’s founders, with CEO Tarun Mehta calling the funding ecosystem a “stupid market” in 2021 when Ather was valued at $187 million after 4 years of selling scooters, while Ola was valued at $5 billion. Ather and Ola also seemed to share a bit of a rivalry — Ather’s CEO had also called out Ola Electric’s claim of being the first to speak of “TrueRange” in 2022, saying that its scooters had been declaring their TrueRange for years, and they even had a trademark on the term, and Ola CEO Bhavish Aggarwal recently taking a swipe at Ather’s marketing, asking them to focus on lowering costs instead.
But as things stand, Ola Electric appears to have sped ahead of all rivals. It has cornered more than 50 percent of India’s electric 2-wheeler market, and now commands a valuation of $6 billion on the public markets. But its success seems to have rubbed off on Ather, much as Zomato’s public market performance seems to rub off on the still-private Swiggy. And with Ather now finally entering the unicorn club, it has even more firepower to catch up to Ola before it runs off with India’s electric scooter market.