India’s leading taxi-hailing app Ola has raised close to $500 million at a valuation of $5 billion.
In the funding round, Edinburgh-based investment management firm Baillie Gifford participated for the first time. The other investors who led the investment are Japan’s SoftBank, China-based taxi aggregator Didi Kuaidi and New York based Tiger Global.
Singapore-based fund GIC also participated in this funding round, a company’s source said.
“Didi Kuaidi’s investment in Ola can lead to cross pollination of best practices that can be used by both companies. Even though Didi Kuaidi competes with a common competitor Uber, I don’t think there is the formation of a global alliance at a strategic level,” says Tarun Davda of early stage venture investment firm Matrix Partners India.
With the current round, Ola has closed over $1.3 billion of external funding, of which over $1.2 billion has been raised over the past year.
In July, Uber had announced that it will invest $1 billion in India over nine months. Even though it entered China and India, Uber hasn’t been able to gain leadership position in either country. The San-Francisco-based company is currently valued at more than $50 billion.
This deal shows Ola is taking its biggest rival Uber head on. The company will use the investment to fuel its new initiatives such as its cab leasing programme for drivers and shuttle and ride-sharing services. It funding will also be used to innovate mobility solutions for the local market such as kaali-peeli taxis in Mumbai, auto-rickshaws in six cities and yellow taxis in Kolkata, the company said in the press statement.
“As we pursue our mission to build mobility for a billion people, we are excited about bringing on board partners who can help us get there faster. We will continue to build for the local market through innovative solutions like Ola Share, Ola Prime and Ola Money, as we grow the mobile ecosystem in India,” said Bhavish Aggarwal, founder and CEO of Ola.
The company now clocks over one million booking requests a day from its mobile app. 3,50,000 vehicles have registered on its platform across 102 cities, the official statement said.
The funding seems to raise some hope for the Indian startup ecosystem that seemed to suffer from fund-squeeze after the China slowdown and the dramatic layoffs at food technology startups TinyOwl and Zomato.
“The slowdown has served as the reality check for the me-too companies with no differentiation as it is they who would find it difficult to raise money, otherwise there is no dearth of funds for quality businesses,” says Davda of Matrix Partners India.
Ola was founded in January 2011 by IIT Bombay alumni Bhavish Aggarwal and Ankit Bhati. In March this year, Ola had acquired its smaller rival TaxiForSure in a $200 million deal.
BW Reporters
Sonal was a writer on startups and entrepreneurship for BW Businessworld,
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