Bengaluru-based cab hailing company Ola has continued diversifying its portfolio with plans to join the club of Indian non-banking finance companies, in a fresh bet on the growing fintech sector in the country.
A media report citing people privy to the matter said that Ola has applied for a permit to launch an NBFC as it is looking to deepen a short-term credit service it currently provides on a pilot basis to riders on its app, under Ola Credit/Postpaid.
The company is now looking to launch a credit card in partnership with a bank and sell insurance to its driver-partners as well as riders. At present, it also offers a trip-insurance service to customers.
It is to be noted that at present, through the Ola Money Postpaid option, users can take multiple rides and club all the payments together for settlement in one go.
And for this, the company has claimed to see 30% M-o-M growth, and may soon take it to its 150 Mn user base. Ola Money Postpaid is made available to customers based on internal big data risk scoring algorithms.
The company has reportedly applied to the Reserve Bank of India for the NBFC licence so that it can expand the operations of Ola Money Postpaid, or Ola Credit, which is a buy-now-pay-later product. While the product will start with a 15-day credit cycle, it could be extended to 30 days depending on the repayment behaviour of customers.
It is being speculated that with further diversification of its services, the company is also looking at raising fresh funds for its digital wallet Ola Money. The fresh funding discussion isn’t new for the company, as with $1Bn offer standing from SoftBank, it is expected to raise fresh funds for Foodpanda and its other plans, including pharmacy.
The company is now struggling to maintain its growth levels in the main cab hailing business, as it saw growth decline to 20% on average in 2018 to 3.5 Mn rides across all segments, including taxis, autorickshaws and shared cabs. That compared with 57% growth in 2017 and 90% in 2016.
The fresh experiment with fintech comes with the hugely promising potential, running alongside the huge risk credit lending brings to the company. To begin with, according to Inc42’s flagship Ecosystem Report, Fintech as a sector has received $6.3 Bn funding since 2008 across 815 deals. This continues to be the trend, as the Indian Tech Startup Funding 2018 report, found that fintech startups raised $1.4 Bn in 121 deals for the year.Order The Report Now!
[The development was reported by ET]