Funding
Ola To Raise Fresh Funds From SoftBank And Others
Homegrown taxi hailing startup Ola has secured $2 billion in new funding from SoftBank Group Corp., and Tencent Holdings Ltd. These fresh funds will help the taxi aggregator fight its fiercest rival in India, Uber Technologies Inc.
Bloomberg reported, this funding round is backed by a venture capital fund jointly run by Indian industrialist Ratan Tata, the investment arm of the University of California and various U.S. institutional investors. The company’s valuation after the funding round is not clear as the round is not yet completed and the total amount raised may vary. However, the cab aggregator saw a steep decline in its valuation from $ 6 billion last year to around $ 2.5 billion this year.
These fresh funds will help Ola build both its supply of vehicles and drivers to maintain the upper hand in the $10 billion Indian market. This sub round of funding was led by the Chinese Internet giant Tencent, with an investment of $ 450 t0 $ 500 million. However, SoftBank, which is supposed to invest close to $ 1 billion in the company, has set terms for Ola to receive the second part of the planned $ 2 billion investment. Ola will only receive the additional funds once it delivers on the goals the Japanese investor has set for the company.
This round of investment marks the second largest funding round in an Indian startup after both SoftBank Vision Fund and Tencent invested a total of about $4 billion in Flipkart this year. These fresh funds come at a time when global rival Uber, is recovering from a management shakeup including a surprise announcement by former CEO Travis Kalanick.
Ola’s co founders Bhavish Aggarwal and Ankit Bhati, have also joined Indiatech.org, an industry body formed solely to fight for local companies to battle against ‘deep pocketed’ global competitors. Led by Flipkart founder Sachin Bansal, this lobby group will represent the interests of local ventures for favorable laws in the digital commerce market space.