Ola CEO Bhavish Aggarwal has taken a U-turn about his concerns over ‘capital dumping’ by foreign players like Amazon and Uber.
He told ET, “I think it is for the relevant government agencies to decide what is happening — whether capital dumping is happening and, if it is happening, should it be prevented?”
He further added, “As an entrepreneur, I am focussed on my business. I am sure the relevant government agencies will have a look at it and decide. As far as Ola is concerned, we are focussed and determined to build a business that can sustain and be impactful.”
Earlier in October 2016, Flipkart co-founder Sachin Bansal expressed his intentions to create a lobby group for local consumer Internet startups. The lobby group proposed to form a trade association that will represent local companies such as Flipkart and Ola to the government for favourable laws.
In December 2016, it was reported that both the entrepreneurs had urged the government to design policies that favour homegrown companies and help them battle with the above-mentioned foreign players.
In 2016, Amazon launched a slew of initiatives with an aim to capitalise upon its market share. In June 2016, Amazon announced that it would infuse $3 Bn in India in the next few years to take on its rivals. In July, it launched its biggest Fulfillment Centre in Sonipat near New Delhi. In December 2016, the ecommerce giant invested a fresh capital of $295 Mn (INR 2,010 Cr) in its main Indian unit to gain an edge over competitors. Earlier this month, Amazon India invested in nine dedicated Fulfillment Centres (FCs) and 33 delivery stations exclusively for furniture and large appliances.
Uber, on the other hand, invested $30 Mn (INR 200 Cr) in Mumbai-based car leasing firm Xchange Leasing India Pvt. Ltd, between June and September 2016.
However, Ola breathed a sigh of relief after reports surfaced that its parent company ANI Technologies Pvt. Ltd has been in talks to raise a $100 Mn funding round. Reportedly, RNT Capital Advisors, a $300 Mn venture fund set up by Tata Sons Chairman Emeritus Ratan Tata, will be leading this round, investing around $60 Mn. The remaining amount will be infused by existing investor, Falcon Edge Capital.
Bhavish, along with co-founder Ankit Bhati founded Ola in January 2011. To date, Ola has raised total equity funding of $1.5 Bn in nine rounds from about 20 investors. While Ola is heavily backed by foreign investors, homegrown unicorn Flipkart, registered in Singapore, is also the posterboy for foreign investment. How far will the card of nationalism work for these players remains to be seen.
