Ola’s Losses Double Up To $360 Mn In FY16

In the attempt to compete with US-based nemesis Uber, homegrown cab aggregator Ola incurred a consolidated loss before tax of $360 Mn (INR 2,313.66 Cr) in FY16, as per regulatory filings with the Ministry of Corporate Affairs. A year earlier, the company’s losses were about $123.9 Mn (INR 796 Cr).

As per regulatory filings, the consolidated revenue for ANI Technologies Pvt. Ltd (Ola’s parent company) was about $117.9 Mn (INR 758 Cr) for the year ended March 2016. The revenue is inclusive of subsidiaries such as Ola Fleet Technologies and TaxiForSure parent Serendipity Infolabs. In the previous year, this number was about $16.1 Mn (INR 103.8 Cr).

Founded by Bhavish Aggarwal and Ankit Bhati in January 2011, to date, Ola has raised total equity funding of $1.5 Bn in nine rounds from about 20 investors. The company integrates city transportation onto a mobile technology platform.

As per a company statement, the Bengaluru-based cab aggregator allows users across 102 cities to book from over 5,00,000 vehicles across cabs, auto-rickshaws and taxis. The aggregator also provides shared mobility services on its platform like Ola Shuttle and Ola Share for commute and ride-sharing respectively.

The consolidated cost of salaries and wages for ANI Technologies increased to about $59.3 Mn (INR 381.2 Cr) in FY16, as opposed to $11.5 Mn (INR 74 Cr) in FY15. On the other hand, the consolidated cost of advertising and sales promotion increased to about $68 Mn (INR 437 Cr).

In February 2017, Ola refuelled its arsenal with $350 Mn from existing and new investors, at a valuation of $3.5 Bn. In April 2017 it was reported that Ola has been in talks to raise a $100 Mn funding round. 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.

In April 2017, it came to light that in November 2016, ANI Technologies had secured $260 Mn (INR 1675 Cr) from its largest stakeholder SoftBank Group. SoftBank facilitated the investment via its subsidiary arm, SIMI Pacific Pte Ltd in Ola’s parent company ANI Technologies Pvt. Ltd.

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. Later, in October 2016, it was reported that Ola was also in talks with SoftBank to raise up to $500 Mn in a fresh round of funding.

App-based cab aggregators have had a tough time in the past year. They have been facing the ire of the Central and State governments regarding surge-pricing as well as licensing issues. 2016 and 2017, for the most part,was marked by bans, strikes, driver protests and legal encounters in Karnataka, Chennai, Delhi, Bengaluru, Mumbai among others. Uber India tried seeking help from state governments and resolving the problem with the drivers amicably with drivers as well as the media, via meetings and blogs. Ultimately, in April 2017 it filed a suit against taxi owners and drivers associations seeking $1.9 Mn (INR 12.41 Cr) in damages for harming its reputation and the livelihood of drivers.

In order to strengthen its foothold in the country, Uber recently launched its business solution – Central – in India, which is fully integrated into Uber for Business. Uber for Business (U4B) is a transportation management platform that enables companies or teams to set up a corporate Uber account. Reports also suggested that it will be launching its food delivery app UberEATS in India in the second quarter of 2017. The services will initially be launched in six cities – Bengaluru, Hyderabad, Pune, Mumbai, Chennai and Gurugram – and will expand further.

(The development was first reported by ET)