The company’s series B funding has come from the world’s largest two-wheeler manufacturer. How will Ather deliver what their investors themselves have not delivered?
Indian companies have not had a good track record when it comes to producing electric vehicles.
The premise on which Ather Energy is working makes it a fascinating story to follow: they are building from the scratch an electric scooter that promises to change the way the vehicles were looked at so far.
The electric scooters that have hit the Indian and global market in the past decade have all been clunky, exotic automobiles that never stood a chance against their petrol-guzzling counterparts.
That the folks at Ather, building this promised vehicle, happen to be youngsters who understand the Indian conditions and are automatically themselves a part of the target audience is a cause for hope. Those who are living in the country’s metros and other cluttered cities, including Chennai and Bangalore where Ather’s engineers have a footprint until now, will quickly relate to the multiple problems that S340 will address. It will, of course, also remain cool and hip in a way only a connected smart scooter can be.
The company recently caught everyone’s attention with the announcement that they had raised Rs.205 crores in a series B round of funding. The more surprising talking point was that the investor was industry incumbent Hero Motorcorp, also the world’s biggest two-wheeler manufacturer.
The big question: How will Ather Energy deliver what the industry incumbents, including those who are funding them, have not delivered so far?
The path for Ather Energy to deliver on its promise will involve, in equal measure, a combination of two things: their ability to stick to their vision without compromise; and their investors allowing them to do with the proper guidance wherever possible without forcing any huge compromises.
In a blog post announcing the series B funding on their website, Ather’s co-founder Tarun Mehta alluded to their vision in the very first sentence. “One of our big learnings over the last three years has been that at Ather we are not just building the S340 but we are participating in the growth of an entire new industry with completely new technology, new platforms and with a very different vendor and re-fueling infrastructure.”
Poor industry track-record
The context of where Ather Energy view themselves cannot be understated.
The BJP government announced last year that it was planning a Rs. 1,400 crore incentives and subsidy package for makers and buyers of electric vehicles. But there is also the huge cloud hanging over whether or not Ather will deliver, given the Indian industry’s poor track record in the sector.
The only brand of any substance when it comes to the electric vehicle sector so far in India has been Reva, which manufactured the popular car, but its latest range post the acquisition by the Mahendra Group the “e2o” has not really enthused the market. Analysts have pointed out that the cost of the vehicle has been a dampener and the company had last year slashed the cost by a huge margin too.
This also, in some parts, explains what appears to be a prolonged delay in the launch of Ather’s S340. The company has also, for supposedly strategic reasons, been cautious in exposing the bike to public; apart from a few open house meetings earlier this year.
The company’s co-founder Tarun Mehta has often referred to the likes of Hewlett-Packard, Apple, Ford, Toyota and Xiaomi in the context of companies that put out consumer products, but also simultaneously create ecosystems.
What it effectively also means is that the S340 might face the burden of a dilemma that those very aspirational companies faced while shipping out their products. One of the most well known flash-points that most of us can immediately think of is the kind of decision making that happened in Apple during the roll-out of the Macintosh– a flashy, purportedly revolutionary product that ultimately failed to attract customers.
The effort that Ather is putting into its vision, can be seen, in some parts, at the open houses that they have organised. The open house that happened in Chennai almost seemed like a dress-rehearsal for their future launch, with all key managers taking to addressing the gathering, explaining the various facets of the vehicle and the ecosystem it would operate in.
Every round of funding is both an opportunity for a company like Ather to rededicate itself to its core vision and a chance to succumb to previous mistakes. In Ather’s case, the issue is all the more complex because being in the manufacturing sector means they have a far more capital-intensive processes to address. It almost felt a bit unfair to probe too much into the recent investment decision. However, I did send him a single question over email, asking just one question.
“What parts of your vision would you say is absolutely non-negotiable when you go in for every round of funding?”
This was Mehta’s answer: “All of it. We believe very strongly that with investors you cannot have a negotiated vision or view of the world. Good investors bet on entrepreneurs. Great investors bet on them to come up with a fresh view of the world – and not be executioners of dreams that they already have. We started Ather because we realised that the future of vehicles is going to be inevitably electric and connected. We realised that this new world will need a new perspective on all things – distribution, marketing, USP, technology, product cycles – almost all elements.
We realised that there is a large space for a product company and that there is a need for engineering and product design to lead the way rather than merely ‘adopting’ work of others.”
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