Ola Raises US$1.1Bn In Fresh Funding From Tencent, Softbank and Others
India’s largest cab aggregator service, Ola running under ANI Technologies Pvt. Ltd, has finally raised US$1.1 billion in fresh funding from China’s Tencent Holdings Ltd and existing investor Japan’s SoftBank nearly more than a week after the news of fund raising surfaced first.
With the latest round of funding, Ola plans to make strategic investments in its supply chain and technology, while also making significant investments into technologies such as artificial intelligence and machine learning. Ola will also invest in increasing its fleet of vehicles and presence in Indian cities, where it is already not present.
On Wednesday, Ola said it was in advanced talks to raise another $1 billion from existing and new investors, thus rounding off what may turn out to be a $2 billion funding round.
Ola’s fund-raise is the latest in a series of billion-dollar funding rounds in the Indian start-up ecosystem this year, with both Flipkart and Paytm having raised massive amounts of capital this year. Flipkart leads the charts, having raised at least $2.8 billion in two separate tranches from SoftBank, Tencent, eBay and Microsoft, while Paytm raised $1.4 billion from SoftBank earlier this year.
“We are thrilled to have Tencent Holdings join us as new partners in our mission to build mobility for a billion Indians. The transportation and mobility industries are seeing huge changes globally. Our ambition is to build a globally competitive and futuristic transportation system in India that will support and accelerate a nation on the move. Our new partners share our passion for building the future of transportation in India together and we look forward to learn and benefit from their global perspectives and ecosystems,” said Ola co-founder and chief executive officer Bhavish Aggarwal in a statement.
Ola, which is the third-most valuable start-up in the country, has been trying to raise fresh capital since June 2016. Prior to this round, it has received at least Rs 2,345 crore from SoftBank Group Corp. Prior to this round, Ola got a pre-money valuation of roughly $3-3.3 billion, a sharp drop from the $4.5 billion valuation it commanded in September 2015. Pre-money refers to the valuation excluding the current round’s cash infusion.
“Ola’s unique local offerings are tailored to India’s burgeoning transportation needs. The strategic partnership with Ola makes it possible for Tencent to be part of the fast-growing ride-hailing space in the country. We look forward to helping Ola further develop India’s transportation solutions,” said Martin Lau, president of Tencent.
The funding round is expected to give Ola a post-money valuation of over $4 billion.
This development was reported in Livemint.