IPO-Bound Ola Bags $500 Mn As Term Loan B Funding

Bhavish Aggarwal-led mobility unicorn Ola has raised $500 Mn through a Term Loan B (TLB) from international investors. The unicorn said that the proposed loan issuance received a strong response from investors with interest and commitment of approximately $1.5 Bn.

The startup will utilise the fresh round to fuel its vision for the future of mobility across its various businesses, including ride-hailing, vehicle commerce, delivery with foods (Ola Foods), quick commerce and financial services.

With this infusion, the ride hailing unicorn has become the third Indian unicorn to raise a Term Loan B round. Ritesh Aggarwal’s IPO-bound OYO was the first Indian unicorn to raise Term Loan B round. The hospitality unicorn, which is awaiting SEBI’s nod for its IPO, had raised $660 Mn through TLB in July.

Later, edtech giant BYJU’s secured $1.2 Bn through TLB for offshore corporate purposes.

Speaking on the fresh infusion, Aggarwal said, “The overwhelming response to our term loan B is a reflection of the strength of our business and our continued focus on improving unit economics alongside rapid growth. At Ola, we are accelerating our journey towards building the New Mobility ecosystem to help a billion people move sustainably.”

The development comes on the heels of the Bengaluru-based startup securing $139 Mn in a fresh funding round. Last week, Inc42 had exclusively reported about Ola’s new fundraise from IIFL, Edelweiss, Hero Enterprise, among others. Earlier this year, Warburg Pincus and Temasek Holdings had bought $500 Mn worth of Ola’s shares from its existing investors.

Prior to this round, Ola had raised $300 Mn from foreign car manufacturers Hyundai and Kia in 2019. 

The unicorn is also gearing up for its potential public listing in the second quarter of 2022. In August, Aggarwal had disclosed Ola’s IPO plans. Aggarwal had said that the company plans to list both Ola and Ola Electric on the stock exchanges. However, Aggarwal highlighted that Ola will be listed first as it is a more mature business compared to Ola Electric which started three years ago. 

Ola Electric, which is Aggarwal’s second venture, has been criticised for failing to deliver its much-hyped electric scooter. On December 15, Ola Electric officially delivered 100 of S1 and S1 Pro vehicles to its customers, but without few features that were communicated earlier.