Author: Dev Patel | EQMint | General News

Bengaluru, October 13, 2025 — Deeptech startup Chara Technologies (Chara Datalabs) has raised ₹52 crore (approximately $5.8 million) in its Series A funding round, led by Arkam Ventures, with participation from IIMA Ventures and existing investors Exfinity Venture Partners and Kalaari Capital.

The funding marks a major milestone for the Bengaluru-based company, which is at the forefront of developing rare-earth-free electric motors — a critical technology aimed at reducing global dependence on China for key magnet materials used in electric vehicles (EVs) and industrial applications.

Funding to Drive Expansion and New Product Development

In a statement, Chara Technologies said that the newly raised capital will be deployed to set up a new factory in Bengaluru, focused on developing rare-earth-free motors and controllers, along with a dedicated testing and validation facility.

The company’s new plant will increase production capacity fivefold, from the current 20,000 units per year to 1,00,000 units annually, as it scales to meet growing domestic and global demand.

The expansion will also facilitate the launch of new product lines, including lighter, higher-speed motors, larger-capacity variants, and industrial-grade models.

“Our goal is to redefine motor manufacturing with sustainable, high-performance solutions that eliminate the dependency on rare-earth materials,” said Bhaktha Keshavachar, cofounder and CEO of Chara Technologies. “This investment enables us to expand capacity, strengthen our R&D, and accelerate global expansion.”

Solving the Rare-Earth Challenge

Founded in 2019 by Bhaktha Keshavachar (former cofounder of Ezetap), Mahalingam Koushik, and Ravi Prasad, Chara Technologies has developed a synchronous reluctance motor (SynRM) architecture that eliminates the need for rare-earth magnets entirely.

The company claims its rare-earth-free electric motors are 15–20% more cost-effective and environmentally sustainable, while matching the performance of traditional permanent magnet synchronous motors (PMSMs) — the industry standard for EVs.

Chara’s proprietary motor design improves vehicle range and reduces energy losses, offering a viable alternative to magnet-based motors that rely heavily on imported materials.

The startup began commercial shipments of its final products in Q1 FY26, marking its transition from R&D to large-scale production.

Applications Across Sectors

Chara’s motors are currently deployed in a wide range of sectors, including electric two-wheelers, three-wheelers, and four-wheelers, as well as agricultural machinery and industrial equipment.

The company already counts over 100 customers, including notable names such as Greaves Cotton, BullWork, Sonalika, VST Tillers, and several European OEMs (original equipment manufacturers).

Chara has also established a presence in Belgium and Italy, and now plans to expand into North America while deepening its footprint across Europe through strategic partnerships and collaborations.

“Our technology not only reduces costs but also enhances sustainability — two critical needs for the future of mobility and manufacturing,” said Mahalingam Koushik, cofounder and CTO of Chara. “By eliminating rare-earth dependence, we’re addressing one of the biggest supply chain vulnerabilities in the global EV market.”

India’s Push Toward Rare-Earth Independence

The timing of Chara’s funding round is significant, as it coincides with growing concerns around China’s export controls on rare-earth materials, which have disrupted global supply chains.

Rare-earth magnets — key components in EV motors, wind turbines, and industrial automation — have seen price volatility and supply uncertainty over the past year, prompting countries to seek domestic alternatives.

India, too, has been taking proactive steps. The government is reportedly preparing to launch a ₹7,300 crore ($822 million) incentive scheme to promote the domestic manufacturing of rare-earth magnets and related components.

“India’s rare-earth ecosystem is at an inflection point,” said Vivek Arora, Partner at Arkam Ventures. “Companies like Chara are not only innovating for commercial success but also contributing strategically to India’s energy security and industrial resilience.”

Growing Investor Confidence in Green Manufacturing

This Series A funding round underscores the growing investor confidence in deeptech and sustainable manufacturing startups that are addressing climate, mobility, and resource challenges.

Including the latest investment, Chara Technologies has raised over $11 million to date from prominent backers such as CIIE.CO, Big Capital, Exfinity Venture Partners, and Kalaari Capital.

The company’s growth story mirrors a broader trend in India’s startup ecosystem — a shift toward hardware innovation, clean tech, and deep engineering solutions rather than purely digital platforms.

“Chara represents the next wave of Indian innovation — where advanced R&D meets real-world industrial application,” said Vani Kola, Managing Director of Kalaari Capital. “Their technology can transform not just EVs but the entire manufacturing supply chain.”

Industry Context: The Global Race for Magnet-Free Motors

Globally, the race to develop rare-earth-free electric motors is accelerating.

In recent months, Ola Electric received government certification for its in-house developed ferrite-based rare-earth-free motor, signaling that Indian manufacturers are increasingly investing in indigenous technology.

Meanwhile, automakers and component suppliers in the U.S., Japan, and Europe are also experimenting with magnet-free designs to mitigate supply chain vulnerabilities.

Experts believe Chara’s technology, which combines cost efficiency, sustainability, and scalability, positions it as a competitive player in this emerging market.

“If Chara can deliver consistent quality at scale, it has the potential to become a global leader in magnet-free motor technology,” said Ankit Gupta, an EV industry analyst at Deloitte India.

The Road Ahead

As Chara Technologies ramps up production capacity with its new Bengaluru factory, the company’s focus will be on scaling manufacturing, enhancing product diversity, and expanding global partnerships.

With government policy tailwinds and increasing demand for sustainable, locally manufactured solutions, Chara’s growth trajectory could mark a new chapter in India’s deeptech and electric mobility revolution.

The company’s rare-earth-free motors not only promise to make EVs more affordable and environmentally friendly, but also reinforce India’s ambition to become a self-reliant hub for advanced technology manufacturing.

References

1. Chara Technologies Raises INR 52 Cr to Expand Rare-Earth-Free Motor Production — Entrepreneur India
2. Chara Technologies raises Rs 52 crore to expand rare-earth-free motor manufacturing — Moneycontrol
3. Deep tech startup Chara Tech has ambitions to solve auto’s rare-earth crisis — The Morning Context
4. India revs up alternate EV motor tests as China curbs rare earths exports — Reuters

Disclaimer: This article is based on information available from public sources. It has not been reported by EQMint journalists. EQMint has compiled and presented the content for informational purposes only and does not guarantee its accuracy or completeness. Readers are advised to verify details independently before relying on them.