EV Startup Matter Bags $35 Mn In Ongoing Series B Round To Strengthen Supply Chain

Electric motorcycle manufacturer Matter has raised $35 Mn (about INR 290 Cr) in its ongoing Series B funding round, led by US-based Helena. Japan Airlines & Translink Innovation Fund, Info Edge’s Capital 2B, Saad Bahwan Investment Management Company (SB Invest), a few institutional investors, and family offices also invested in the round.

The emobility startup plans to use the fresh funds to accelerate its manufacturing plans, and strengthen its supply chain. It will also use the capital for marketing and setting up retail stores.

Last week, Inc42 reported that the startup raised around $10 Mn (INR 82.6 Cr) in a funding round. Matter said this funding was also part of the $35 Mn funding round. 

Matter founder and CEO Mohal Lalbhai told Inc42 that the startup is looking to raise $65 Mn-$70 Mn in the Series B round, and the $35 Mn is the first tranche of it.

Founded in 2019 by Lalbhai, Arun Pratap Singh, Kumar Prasad Telikepalli, and Saran Babu, Matter claims to have developed its proprietary technology stack, which includes its energy storage systems and a drive train. Over the years, the startup has also developed its electric motorbike AERA.

Commenting on getting international investors in its captable, Lalbhai said, “As far as the EV space is concerned, there is still a significant white space in the motorcycles market, and this has been the core driver of their investments into the company.”

During its $10 Mn fundraise in 2022, Matter said it was gearing up for the launch of AERA by the end of that year. 

However, the plan was delayed, and the startup is now aiming to start its vehicle deliveries by Diwali this year.

Lalbhai told Inc42 that while demand has never been a problem, creating a robust supply chain was important before AERA hit the Indian electric two-wheeler market, which is ruled by escooters.

“The lopsided nature of India’s electric two-wheeler market is that there are almost zero motorcycles and 100% escooters. This is a disconnect from the internal combustion engine market, which comprises two-thirds motorcycles and one-thirds scooters. Barring a few players, nobody else is playing in this space. We wanted to ensure that once we start supplies, the supplies stay consistent and we can keep scaling up,” said Lalbhai.

He believes that a strong distribution channel is crucial in this business and hence, Matter is looking to set up its stores. Its first flagship store is set to open in Ahmedabad in August. After that, the EV maker aims to expand its store presence to Mumbai, Pune, Bengaluru, Hyderabad, and Chennai, Delhi and Assam. 

Having strengthened its supply chain and received 40,000 pre-orders, Matter is aiming to start selling 5K-6K units of its electric motorcycles per month by March next year.

By the end of 2025, it expects its EV sales at 10K units per month.

Meanwhile, commenting on the funding, Helena managing partner Suprotik Basu said in a statement, “We believe it is an inevitability that transportation in this market will electrify, and India is the most exciting place in the world for that transition to materialise. The question is which team will be nimble, innovative and hardworking enough to seize this moment of transition. The Matter team has impressed us immensely with their approach towards value-driven, high-performance technology products.” 

Currently, Matter generates revenue from stationary applications of lithium-ion batteries in non-motorcycle applications. However, in the next 12 months, Lalbhai expects a significant portion of its revenue to come from sales of AERA.