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India has taken to electric scooters with real enthusiasm; electric motorcycles, almost not at all. That gap is the whole premise of Matter, the Ahmedabad startup behind the AERA electric bike, which has just raised $25 million in growth funding to push from pilot production into the real thing. The round came entirely from existing backers, including US firm Helena, Capital 2B, Japan Airlines, Canada’s TransLink Innovation Fund, and the Shakopee Mdewakanton Sioux Community, and takes Matter’s total capital raised past 1,000 crore rupees, roughly $105 million.
What sets Matter apart is what it is trying to replace. Where most Indian EV two-wheeler makers chase the booming scooter market, Matter is going after petrol motorcycles, the geared, enthusiast-friendly bikes that dominate the 150cc to 200cc segment. Its AERA is built around an unusual hook: a manual gearbox on an electric bike, which keeps the familiar feel of shifting gears that scooter-style EVs throw away. Founder Mohal Lalbhai is blunt that this is not an EV-versus-EV fight but an EV-versus-petrol one.
From pilot to production
The money is aimed squarely at scale, and the numbers show how early Matter still is. It began commercial manufacturing only in late 2024 and has produced somewhere around 1,500 vehicles so far. Output has climbed to roughly 1,000 a month, up from a trickle of 100 to 200 during the pilot, and the company now wants to reach 5,000 a month by the end of the financial year. On the retail side, it plans to grow from 30 dealerships across 21 cities to about 50 by year-end, focused on western and southern India, with 100 more touchpoints planned for next year. Four new bikes on the AERA platform are coming, aimed at the same 150cc to 200cc space and priced between 1.6 and 2.2 lakh rupees.
The bet, and its risks
Here is where the ambition meets the arithmetic. Electric motorcycles make up something like 0.1% of India’s motorcycle market, against roughly 25% for scooters. Matter reads that emptiness as opportunity, a category waiting to be created rather than a signal that buyers do not want it. Maybe. But it also means Matter has to win people over from petrol bikes they already trust, on price and feel, against established names like the Yamaha R15, TVS Apache, and Bajaj Pulsar. That is a harder sell than swapping one scooter for a cleaner one.
The competitive squeeze is tightening too. Bharat Forge-backed Tork and TVS-backed Ultraviolette are already in the electric-motorcycle space, and heavyweights including Royal Enfield, Hero, and Norton are entering it in 2026. There is a supply-chain vulnerability as well: Matter still imports its cells, magnets, and key semiconductors, leaving its costs hostage to forces it does not control. And an all-insider round, with no new outside lead, can read as steady conviction or as a sign that fresh capital was harder to court.
So is Matter early to a market that is about to take off, or building for demand that has not shown up? The honest answer is that nobody knows yet, including Matter. What the company has is a clearly differentiated product, patient backers willing to keep funding the climb, and a clear run at a segment its bigger rivals have only just noticed. The next year, as it tries to quintuple production, will show whether an empty market is a runway or a warning.
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