Ratan Tata, chairman emeritus of Tata Sons, has made an undisclosed personal investment in Coimbatore-based electric bike company Ampere Vehicles Pvt Ltd. This would be Tata's ninth known investment in the technology space since he retired as executive chairman of Tata Sons in 2012.
Ampere's existing investor Forum Synergies has also put money in this round, according to a report in The Hindu newspaper, which was the first to report this development.
Ampere's founder Hemalatha Annamalai confirmed the development.
Ampere, which sells electric vehicles and special purpose vehicles for the differently abled among others, will use the money to scale up operations and expand its talent pool. It sells products under brand names such as Angel, Bobo, Prince and V60 in Tamil Nadu, Karnataka and Andhra Pradesh.
Annamalai, a computer software engineer from Government College of Technology (Coimbatore) and an MBA from Royal Melbourne Institute of Technology (Australia), started Ampere in 2008. She pooled in personal savings of around Rs 10 crore to kick-start the venture.
Ampere would be Tata's first investment in an automobile startup. Under his chairmanship, Tata Sons' arm Tata Motors had conceived Nano, now one of the world's cheapest cars.
Recently, Tata put money in Ola, the country's largest cab aggregator. He has also backed Paytm parent One97 Communications, Snapdeal, Urban Ladder, Bluestone and CarDekho besides investing in Chinese handset maker Xiaomi.
US-based airborne wind turbine developer Altaeros Energies and Grameen Capital, which dabbles in microfinance, are also part of Tata's portfolio.
He also invested in KAARYAH Lifestyle Solutions Pvt Ltd, which operates an e-commerce site selling women's fashion wear besides offering its products through third party e-tailers.
This marks the second venture funding in electric vehicle space this year. Recently, Bangalore-based startup Ather Energy Pvt Ltd, which is designing electric scooters and is aiming to roll out its first product by next year, raised a significant sized Series A round of funding from Tiger Global.
Sales of electric vehicles in the country are estimated to have declined by a fifth to around 16,000 units in the year ended March 31, 2015 over the previous year. It is a far cry from sales milestone of 100,000 units as recently as four years ago.
The range of battery powering the vehicles, and thereby the distance such vehicles can travel at one charge, has always been a problem. Lack of institutional charging points like the developed markets, also restricted adoption of e-vehicles in the country.
Indeed, after the euphoria during 2005-10 when several players entered the market, there was a shake-up leading to the exit of many ventures and some like TVS Motor stopped selling e-scooters.
Hero Electric, part of the group which also makes Hero Cycles (separated from Hero MotoCorp), is one of the prominent players in the business. It had entered the market around a decade ago in a JV with UK-based e-vehicle tech firm Ultra Motors. It later scrapped its JV and later bought Ultra out. Another player is YO Bykes, run by public listed firm Electrotherm.
Mahindra Group has a US-based venture GenZe involved in electric two wheelers, which is separate from Mahindra Two Wheelers. Mahindra Group also sells electric cars through Mahindra Reva Electric Vehicles.