Over the past couple of months, online taxi market has been buffeted by regulatory issues in the aftermath of the rape of a female passenger by an Uber driver in Delhi. The whole market is up and down with uncertainty of future. If reports are to be believed, TaxiForSure co-founders Raghunandhan G and Aprameya Radhakrishna may step down after the company is merged with larger rival Ola.
The person familiar with the development said, “After the transition period is over, TaxiForSure founders — who will be mostly paid in cash — are likely to exit the company. That is the agreement. However, the top management and other employees of taxiForSure is expected to retain their roles”
According to the marker reports, Ola is in an advanced stage of finalising a deal to buy TaxiForSure at an estimated $200 Mn in stock and the deal is expected to close later this week. This move will make Ola to give really tough competition to heavily funded Uber. Ola and TaxiForSure will continue to operate as separate brands, at least for a while after the the merger.
Commenting on the deal an investor in TaxiForSure said, “The deal is being signed at about $200 million in mostly stock-swap with a swapping ratio of about one Ola share for seven TaxiForSure shares.”
The deal will give Ola — which has at least 3,200 employees and operates in 67 cities — a ready workforce of 1,500 trained call-centre, onboarding and operations executives, adding muscle and reducing the time the company will need for further expansion.
The venture capital investors of TaxiForSure which includes Accel Partners, Helion Ventures Partners, Bessemer and Blume Ventures are likely to move forward with their shares into the combined entity and take a small portion of the consideration in cash.
Earlier, there were reports that TaxiForSure may see exits from its 1,500-strong workforce in the wake of its imminent acquisition by cross-town rival Ola. However, the company said, “We are taking all measures to ensure that there will be no casualties if the deal (with Ola) is done.”
Founded by IIM-Ahmedabad graduates Aprameya Radhakrishna and Raghunandan G in June 2011, TaxiForSure operates across 40 cities in India. TaxiForSure.com is an aggregator of car rentals and taxis in India. They work with various taxi operators and enable them with technology to ensure that customers get an easily accessible, safe, reliable taxi ride ‘for sure’.