Chara Technologies Raises INR 52 Cr To Scale Rare-Earth-Free Motor Manufacturing

Deeptech startup Chara Technologies has secured INR 52 Cr (about $5.8 Mn) in its Series A funding round led by Arkam Ventures. The round also saw participation from IIMA Ventures, alongside existing investors Exfinity Venture Partners and Kalaari Capital.

In a statement, Chara said that the funds will be deployed to set up a new factory in Bengaluru to develop rare-earth-free motors and controllers, along with a dedicated testing and validation facility.

The startup said that this expansion would increase its production capacity to 1 Lakh units annually from 20,000 currently. Further, Chara is planning to launch new product lines, including lighter motors with higher speed, larger-capacity variants, and industrial models.

Earlier in June, Inc42 reported that the startup was in the process of raising INR 50 Cr to INR 60 Cr in its Series A round.

Founded in 2019 by former Ezetap cofounder Bhaktha Keshavachar, Mahalingam Koushik and Ravi Prasad, Chara provides an alternative to rare-earth motors which are used in EVs. The startup began shipping its final products in Q1 FY26. 

Chara claims to have built a synchronous reluctance architecture that eliminates magnets entirely, making its motors 15-20% more cost-effective and sustainable while matching the performance of permanent magnet synchronous motors. The startup claims its motors deliver higher vehicle range, and reduce energy losses. 

Its motors are used in two-wheelers, three-wheelers, and four-wheelers, as well as in agricultural and industrial equipment. Chara claims to have 100 customers, including Greaves Cotton, BullWork, Sonalika, VST, and European original equipment manufacturers (OEMs).

It currently has presence in Belgium and Italy in Europe, and now plans to target North America and Southeast Asia and deepen its presence in Europe.

Responding to Inc42’s queries, CEO Keshavachar said in an emailed response, “Our NextGen motors are being tested now in our labs, these will be lighter, more efficient and capable of running at higher speeds. We are also expanding our product line, with motors at 400V that are capable of propelling a medium-sized car.” 

Including the new investment, Chara has raised more than $11 Mn in funding since its inception, from the likes of CIIE.CO, Big Capital, among others. 

Keshavachar added that the startup plans to raise debt later in the ongoing quarter to support its manufacturing plans.

The funding comes at a time when China’s export controls on rare-earth magnets have hit the global automotive industry, including in India. While the supply has improved over the past month or so, concerns still persist. 

In order to address these concerns, many OEMs are working on developing their own rare-earth magnet free motors. Earlier this month, Ola Electric said it received government certification for its in-house developed rare-earth-free ferrite motor.

The Centre is also said to be gearing up to launch an incentive scheme worth INR 7,300 Cr ($822.3 Mn) to promote domestic manufacturing of rare-earth magnets.