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Ola Drives On: Existing Investors, Others Refuel With $350 Mn Funding At $3.5 Bn Valuation

Ola Drives On: Existing Investors, Others Refuel With $350 Mn Funding At $3.5 Bn Valuation

Online cab aggregator Ola has reportedly raised $350 Mn from existing and new investors. As per a report by the Financial Express, the company has received said funds from existing and new investors and the latest round of funding has valued the company at $3.5 Bn.

An email sent to the Ola spokesperson did not elicit a response. The names of the investors remain undisclosed, as of now.

In November 2016, it was reported that the Softbank Group Corp marked down close to $555 Mn in two of its Indian investments, Ola and ecommerce marketplace Snapdeal, as per its six monthly earnings report, ending September 2016.

Earlier this month, American investment management company, Vanguard Group also slashed the valuation of of its stake in Ola’s parent firm, ANI Technologies Pvt. Ltd by over 40%.  Softbank, furthermore, wrote off around $475 Mn in its combined shareholding value in Ola and Snapdeal, for the period ending December 31, 2016.

In June 2016, reports also surfaced that Ola was in talks with existing and new investors to raise $300-400 Mn last year. In August 2016, it was revealed that US-based investment firm Vanguard invested $50 Mn in Ola in December 2015, taking Ola’s valuation to $4.2 Bn. In October 2016, it was reported that Ola was in talks with SoftBank to raise up to $500 Mn in a fresh round of funding.

Founded by Bhavish Aggarwal and Ankit Bhati, in January 2011, Ola has raised total equity funding of $1.25 Bn in eight rounds from about 20 investors such as Tiger Global, DST Global, and Softbank. Its last funding round was in November 2015, where it raised $500 Mn in its Series F funding round at a valuation of $5 Bn.

Bumpy Ride

2016 was a rough year for Ola. In March 2016, Ola shut down its food-delivery service ‘Ola Cafe’, a few days after the shutdown of its grocery service, Ola Store.

Prior to this, in February 2016 the Karnataka government suggested new rules, to level the competition between all cab operators in the state. In April 2016, after the Karnataka government’s decision to curb surge pricing by taxi aggregator, reports emerged that the Maharashtra government was planning to adopt the same.

In June 2016, both Uber and Ola registered themselves with the Karnataka On Demand Transportation Technology Aggregators Rule, 2016 and while Ola received the license, Uber didn’t.

In July, the Delhi Autorickshaw Sangh and Delhi Pradesh Taxi Union called for an indefinite strike against app-based taxi services in Delhi. Later that month, after facing backlash in Karnataka and Delhi, Ola also faced threats by the Maharashtra taxi and auto rickshaw unions, to get banned by the Mumbai taxi and auto rickshaw unions.

In August 2016, Ola shut down its TaxiForSure business and laid off over 1,000 employees. Ola had acquired TaxiForSure, in March 2015, for over $200 Mn. In September 2016, it fired around 250 employees on performance grounds and eliminating contract roles due to a business realignment.

In January 2017, Karnataka’s Transport department gave a three-day deadline to online cab aggregators, Ola and Uber, to stop their cab-sharing services in the state. UberPOOL and Ola Share services were also deemed illegal in Karnataka. Later, the Karnataka government came to the rescue and gave the companies a 15-day extension to comply with rules regarding ride-sharing services.

Demanding for better perks, accident insurance, and to be paid as per government sanctioned fare i.e. INR 21/km, among other things, the Sarvodaya Driver Association of Delhi called for a strike on February 2017. However, after the Delhi Government intervened in the matter, the strike by SDAD was finally called off on February 23, 2017, after 13 days .

Prominent Exits

In April 2016, Ola’s Head of Cabs Category Management, Pradeep Dodle and Associate Vice President of Products, Harsha Kumar resigned.

In December 2016, Ola’s VP of New Initiatives Sundeep Sahni resigned from his position. Sundeep had joined the core leadership team of Ola in 2015, and departed after spending close to one and a half years with the company.

In February 2017, Ola also witnessed the exit of Chief Financial Officer (CFO) Rajiv Bansal and Chief Marketing Officer (CMO) Raghuvesh Sarup.