Even as Indian-bred cab-hailing firm Ola expands its operations to the UK, Singapore-based Temasek Holdings has purchased a large single-digit stake in the company for around $225 Mn.
According to a report, the stake was purchased from a group of early investors in the company, though Temasek is also in discussions with Ola’s management to pump in more money into the company by way of subscription to new shares.
Earlier, it was reported that Ola is in discussions with new investors to raise about $1 Bn. This would also mark the first major liquidity event for the ride-hailing firm.
The latest report further highlighted that the new funding would enable Ola founder Bhavish Aggarwal to diversify the company’s shareholder base.
“Temasek has come in as a white knight in the company both because this will help Bhavish ensure there is more bandwidth on the board and also because as a strong sponsor they have the ability to pump in more funds,” according to an industry executive cited in the report.
An email query sent by Inc42 to Ola didn’t elicit any response till the time of publication.
It is being further speculated that some employees of Ola are also expected to sell some of their shares as a part of this round, in addition to angel investor Rehan Yar Khan and venture capital (VC) investors who received shares in Ola after its acquisition of Taxiforsure in 2015.
These include VC firms Accel India, Bessemer Venture Partners, Helion Venture Partners, and the Taxiforsure founders Aprameya Radhakrishna and Raghunandan G.
Ola: Expansion With An Eye On Profitability
Time and again, reports have surfaced that Ola is looking to set up operations in New Zealand and other countries in Asia and North Africa.
Reports also claimed that the company has already set up teams in Dhaka, Bangladesh, and in Colombo, Sri Lanka.
However, this week, Ola announced that it has launched operations in the UK where it is offering passengers the option of private hire vehicles (PHVs) and Black Cabs. It plans to incorporate additional transportation options on its platform in future.
Ola has obtained licences to operate in South Wales and Greater Manchester and will launch operations in South Wales within the next month.
In a recent letter to Ola employees, CEO Bhavish Aggarwal said that the company is now making money on each ride. However, it has not sacrificed top-line growth or ceded market share to Uber to achieve this goal.
Aggarwal wrote in the email that Ola is aiming to become profitable this year. “We will continue to focus on profitable and sustainable growth, and building a growing profitable business, the first in Indian Internet,” he added.
Till March 2018, Ola had raised a total of $3.9 Bn in 11 funding rounds from about 20 investors. It is currently present in 110 cities with more than 1 Mn driver partners. It has 14 service categories and ferries 2 Mn people every day.
Ola, which is owned by ANI Technologies, is setting up a group holding company that will own Ola Cabs, Foodpanda, and its other businesses that are still in the nascent stage, such as its electric cabs and international operations.
According to the data from consulting firm Redseer, the gross book value (GBV) of companies in the local ride-sharing space increased to $2.1 Bn in 2017 from $1.5 Bn in the previous year.
The Indian online mobility market, which encompasses the cab aggregator and auto hailing segments, contributed over 15% of the industry’s overall gross book value in 2017.
Meanwhile, Ola’s biggest rival in India, Uber, continues to tap into various market opportunities within the country. At present, it has tests ongoing for Uber Express Pool. COO Barney Harford earlier said that Uber has a clear position of strength in India.
With Ola flush with its latest funding and ready to challenge Uber in another of its major markets, the cab-hailing industry is seeing an exciting turn of events.
[The development was reported by ET.]