Transportation startup Ola has received Rs 1,675 crore in fresh funding from existing investor SoftBank, according to filings made to the Registrar of Companies.
The Japanese telecom and internet giant SoftBank’s subsidiary SIMI Pacific infused the capital in Ola by picking up 12,97,945 shares valued at Rs 10, at a premium of Rs 12,895.The development comes at a time when the home-grown company is fighting an aggressive battle with its cash rich American rival Uber.
TOI first reported in its October 13 edition last year that the Bengaluru-based company was in talks with SoftBank and other investors to raise up to $500 million in a bid to ward off Uber from gaining share in the Indian market. Interestingly, SoftBank’s additional investment in Ola comes at a time when the Japanese group is pushing to sell its e-commerce bet in India -Snapdeal -and merge it with its bigger rival Flipkart.
Ola has raised this tranche of funds at a valuation of $3 billion, sources close to the matter told TOI, lower than its last round when it racked up $500 million in November 2015 at a valuation of $5 billion. “While the SoftBank money is in, the company is talking to new investors to raise more capital.These investors may come in at a higher valuation,” a person familiar with the developments said.
All told, Ola has raised clo se to $1.5 billion so far. The cab aggregator has been cutting down on its monthly burn rate by lowering driver incentives, just like Uber. An email sent to Ola spokesperson did not elicit any response.
Founded by Bhavish Aggarwal and Ankit Bhati in 2010, Ola claims to have more than 70% share of the taxi app market in the country , clocking an average 1 million rides a day . That number is publicly disputed by Uber, which recently said it’s registering 5.5 million rides weekly , making India the second largest market for the $69-billion valued firm.
Since last year, the domestic player has aggressively launched new offerings like Prime and Micro, besides introducing options like Ola outstation, rentals, Lux, Play and a membership programme called Select.