It isn’t clear how much Kamath would invest in Ather but one of the persons said the transaction would be made through a secondary share sale. In a secondary share sale, existing investors sell their entire holdings to new investors, but the money doesn’t go to the company coffers.
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It is unclear which entity Kamath will use to invest in Ather, but the people cited above said the deal is nearing completion. Typically, he invests through Kamath Associates and NKSquared.
Kamath declined a request for comment on the matter, while an email sent to Ather Energy did not elicit any response till press time on Sunday.
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Kamath has been actively investing in homegrown startups despite a prolonged funding winter in the growth- and stage-stage startup segments. On September 4, he invested Rs 100 crore (about $12 million) in e-gaming company Nazara Technologies.
Other startup investments of Kamath, who also runs wealth management company True Beacon and real estate-tech and cleantech-focussed venture capital firm Gruhas, include fish and meat e-tailer Licious, and coffee brand and cafe operator Third Wave Coffee Roasters.
Kamath’s latest bet on Ather comes at a time when the 2013-founded firm had to curtail its bigger fundraising plan of around $250 million. Unfavourable market conditions notwithstanding, the startup plans to expand its product portfolio and sales footprint to compete against its younger rival Ola Electric’s majority market share.
Ola Electric remains the biggest electric scooter seller in India, accounting for 17,389 of the more than 59,000 electric two-wheelers sold in the country in August, according to Vahan, the government’s portal for automobile registration.
Ather Energy was last valued at $739 million during a $50 million fundraise in October 2022, as per Tracxn. A report in The Arc said the firm shelved its plans to raise $250 million at a valuation of $1.3 billion in 2023.
Beyond a broader technology sector funding crunch, Ather Energy, like its peers in the electric vehicles segment, is also facing a hit to sales since the rollback of the government’s Faster Adoption of Manufacturing of Electric Vehicles (FAME-II) subsidies in June.
Ather sold 6,835 units in August. In March and June, when the FAME-II subsidies were in place, the brand sold 12,184 and 15,420 units respectively.
In an interview with ET late August, Ather Energy founder and CEO Tarun Mehta said the firm was looking to manufacture and sell about 16,000 vehicles per month by October 2023. It was working on a new “family scooter,” targeted to release late 2023 or early 2024, Mehta told ET.