Ecommerce giant Flipkart’s co-founder Sachin Bansal may invest $100 Mn in Bengaluru-based cab hailing giant Ola. This may reportedly be the largest personal investment by an individual investor in the Indian Internet space.
The deal is of great significance as the investments will cost Bansal nearly 10% of the personal wealth that he accrued after US retail giant Walmart acquired Flipkart in a $16 Bn deal. Bansal reportedly earned around $1 Bn after selling his entire 5.5% stake in the company to Walmart and was forced to exit the company by stepping down from his position as CEO in May this year.
According to a media report, the investment will be made mainly through subscription of new Ola shares. A small part of the shares will also come in via a secondary sale by existing investors.
With this deal, Bansal will make an entry into Ola as a small but significant shareholder.
Bansal’s Journey As An Entrepreneur
Sachin Bansal, along with Binny Bansal, founded Flipkart in 2007 as an online bookstore. Flipkart, which has seen many ups and downs, has grown to become the biggest homegrown ecommerce company in India, so much so that Walmart, which has been looking to enter India for over a decade, chose to invest in Flipkart to gain a foothold here.
Earlier, in August, reports had surfaced stating that Sachin Bansal was considering to set out on a new entrepreneurial journey by the end of this year, but in the artificial intelligence space this time.
The report added that Bansal and Ola CEO Bhavish Aggarwal have been on good terms over the years. Earlier, they even came together publicly to voice their opinion om how domestic internet startups were not getting a level playing field with global giants such as Amazon and Uber coming to India. Amazon and Uber are the of major competitors for Flipkart and Ola respectively.
Ola’s Ride To Growth This Year
Ola was founded in 2010 by Ankit Bhati and Bhavish Aggarwal. The cab aggregator has been looking at raising funding in order to scale its business and strengthen its position in the market.
Recently, media reports suggested that the company is reportedly in talks with African Internet conglomerate Naspers LLC to raise funding at a valuation of $7-8 Bn. Currently, Ola is valued at $4Bn
Earlier in September, Ola had also raised $50 Mn in a round led by Hong Kong-based Sailing Capital and the China-Eurasian Economic Cooperation Fund (CEECF).
With its growing base in India, Ola has also announced its plans to expand its operations to New Zealand and has already appointed a country manager there. This devlopment of expansion come right after the platform began its services in UK as it received license to operate in South Wales and Greater Manchester .
Further, the cab-hailing platform also entered the foodtech space this year by partnering with foodtech platform Foodpanda. Under the partnership, users will be able to order food via the cab-hailing app.
Recently, Ola also received support from Singapore-based Temasek Holdings as it have purchased some secondary shares in Ola. This deal had helped Ola cofounders strengthen their position in the company who have been revising the company’s Memorandum of Understanding (MoU) or Articles of Association (AoA) to make sure that their stake in the company continues to remain strong.
[The development was reported by ET]