Online taxi aggregator Ola has firmed up plans to raise $250 million from existing investors, in a bid to take on multinational rival Uber. According to a recent filing with the Registrar of Companies, ANI Technologies that operates Ola, has proposed to sell 12.9 lakh shares at a price of Rs 12,905 in a rights issue to its shareholders.
Ola’s investors include Japan’s telecom and internet conglomerate Softbank, Didi Kuaidi, Falcon Edge Capital, Tiger Global and DST Global. It has so far raised $1.56 billion in nine rounds from 21 investors. Ola and Uber have been locked in an intensive battle for supremacy in India’s growing cab hailing market. In FY15, Ola had posted a net loss of Rs 755 crore and is yet to furnish details of its financial performance for FY16.
The fundraising plan comes close on the heels of India’s largest e-commerce company Flipkart announcing an investment raising of $1.4 billion from Tencent Holdings, Microsoft Corp and eBay Inc.
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The current fund raising also comes at a time when the cab aggregator business is grappling with increased scrutiny by the government whether it may be within the terms of licence or surge in pricing, apart from the rift it has been witnessing with the cab drivers. The state governments have been imposing restrictions on their operations such as ban on surge pricing and shared services.
The recent funding will also help Ola in increasing its fleet size. Recently, it had announced rollout of electric cars on its platform and it is planning to pilot a few thousand electric cars in several Indian cities this year. Ola will also be investing in setting up charging station in these pilot cities.
Ola currently operates in 102 Indian cities and claims to have more than 4.5 lakh vehicles on its platform. Though Uber doesn’t disclose its numbers, it is estimated to have 3.5 lakh cabs on its platform. Uber has invested more than $1 billion into its Indian operations.
Sameer Ranjan Bakshi
