Tork Motors, India's first indigenous e-bike startup, has received an endorsement in the form of an investment of a "token amount" by Ratan Tata, chairman emeritus of the Tata Group, industrialist and investor.
Speaking exclusively to CNBC-TV18, Kapil Shelke, founder of Tork Motors said that he couldn't reveal the exact extent of the investment, but that the token amount can range anywhere in the rather broad range of "10 lakh to 10 crore". Tork Motors was valued above Rs 70 crore when Tata made this investment, Shelke told CNBC-TV18. Earlier this year, Tata also made an investment in Ola Electric Mobility, which is currently piloting several electric mobility programs. "Mr. Ratan Tata is a big name. There were some connections that I used, as he has also invested in Ola Electric. When I went to meet him, I went with the parts we were building in-house, whatever we are making in India, and he liked what we are doing. He told us he would like to endorse Tork Motors and made a token investment in the company in his personal capacity" Shelke said.
So far, the startup has raised funds through three rounds of funding. The most prominent angel investor in Tork is Bhavish Agarwal, co-founder and CEO of home-grown cab aggregator Ola Cabs. The start-up was then valued at Rs 12 crore.
ALSO READ: Ola Electric turns 'Unicorn' with $250 million from SoftBank In the second fund-raising round for Tork, Bharat Forge invested in the company at a Rs 70 crore valuation, Shelke told CNBC-TV18, adding that discussions are currently underway on further rounds of investments, at a valuation of above Rs 70 crore. Shelke said he, along with the other directors on the board owns around 45 percent stake in the company, inclusive of employee stock options. Bharat Forge is the biggest shareholder then, with a 25 percent stake in the company, while the other angel investors, including Bhavish, own 10 percent. "Bharat Forge, Bhavish Agarwal, and our other angels have already committed to us that they will participate in the next round of funding, but we are also talking to new investors. We're seeing interest from everyone - including VCs and ultra-HNIs", Shelke told CNBC-TV18. Tork is currently doing test drives with consumers who expressed pre-interest in the startups first electric performance bike, the T6X, which was unveiled in 2016. Pre-bookings are not currently open for the bike, but Shelke's volume forecast for the product is humble. "We are building a plant with a capacity of 20,000 units, but since we are only starting in two cities, Pune and Bangalore, our utilization of this capacity will be limited", Shelke said. "We expect to sell only 2000-3000 bikes in the first year", he added. On pricing, The T6X will be priced between Rs 1 lakh - Rs 1.5 lakh, Shelke told exclusively to CNBC-TV18. The critical volume that will substantially bring down costs, Shelke said, is 50,000-60,000 units, which the company hopes to be able to achieve in the next two-three years. " But isn't that a lofty target to achieve given volumes in the first year will be limited to 2000-3000 units?
"Our product is 90 percent localized, except the cells. We manufacture everything in India, which drives up our costs. But Indian suppliers are very good at scale management, our idea is that let's build everything in-house, understand every part and then expand" Shelke said. "Since we will grow horizontally over the next years, our costs will come down," he said.While Tork's presence will be limited to Pune and Bangalore in 2020, the next cities on the company's interest-map include Mumbai, Hyderabad, and Chennai. Shelke said expanding into different geographies will be a data-driven decision.