Ola Raises $2 Billion From SoftBank, Ratan Tata; Creates War Chest To Battle Uber!
India born Ola Cabs is the lone competitor of Uber in India.
India born Ola Cabs, which is the lone competitor of Uber in India, is now preparing for a much tougher, much longer battle in the online cab booking space.
As per reports coming in, Ola has managed to raise massive $2 billion from a consortium of investors, which includes Softbank, Tencent and Ratan Tata.
If this news is indeed true, then this would be 2nd largest funding ever by any Indian startup.
The largest round of funding in Indian startup space was successfully done by Flipkart in August this year, when they raised $2.5 billion. Interestingly, Softbank and Tencent, both were the major investors in that deal as well.
We can safely assume that the ongoing war between Ola and Uber to dominate app-based taxi service market is far from over.. In fact, it has just reached the second level.
$2 Billion Funding Raised by Ola – Reports
Since last few hours, several credible and mainstream publications have reported the funding of $2 billion, and there are several investors who have pooled in to empower Ola, and prepare them against Uber’s onslaught.
SoftBank Group Corp. and Tencent Holdings Ltd are the primary investors, who have funded $2 billion corpus for them. Meanwhile, money has also came in from an unexpected source: Ratan Tata.
As per reports coming in, funds from a venture capital arm jointly run by ace entrepreneur and Chairman of Tata Sons Ratan Tata and University of California’s investment arm has been pooled in the overall funding of $2 billion.
Ratan Tata had earlier invested in Ola in his personal capacity.
Other prominent investors include: Tiger Global Management, DST Global, Accel and Sequoia Capital.
Few unnamed U.S. institutional investors have also invested in this round of funding.
Note here, that they haven’t officially acknowledged the exact amount of funding, and their valuation after this funding round is also not clear.
In November last year, when they had raised funds from SoftBank, UC-RNT and Falcon Edge Capital, they were valued $5 billion.
However, after that, they accepted a 30% reduction in valuation before their last funding in February this year, when they were valued at $3.5 billion.
We are awaiting more details.
How Will This Funding Help Ola?
Ola right now wants to expand aggressively in Tier 2/3 cities, where Uber is not even present, and this may be the primary requirement of this new round of funding, which is second highest in Indian startups entire history.
New vehicles, more subsidies for drivers, and better incentives can be the motto now for Ola. Analysts are saying that Ola and Uber, both are showing excellent ROI and growth in the top 7-8 cities of India, where app-based taxis are now becoming a norm and habit.
However, the next major ground to cover are the 100 odd Tier 2 and 3 cities, where both Ola and Uber need to understand the market dynamics, expand and attract vehicle owners to participate.
The way Softbank and Tencent have been funding Uber’s China competitor Didi Chuxing, and making them stronger to counter Uber’s aggressive stand, it is clear that they want something similar in India as well.
And Ola is their best bet, as of now.
Will Ola be able to beat Uber in India? Do let us know by commenting right here!