Temasek To Lead $300 Mn Ola Electric Funding Round

Singapore’s sovereign wealth fund Temasek is reportedly set to lead a $300-350 Mn funding round in its portfolio startup Ola Electric. The PE firm is said to be looking to invest $100-150 Mn in the electric vehicle maker.

Per sources cited by Mint, the deal is said to be in the final stages of due diligence, as the funding round is set to take Ola Electric’s valuation to $6 Bn, 20% higher than the $5 Bn valuation it secured in its $200 Mn funding round last January.

Temasek’s first investment in Ola Electric was as part of a $53 Mn round in 2021, valuing the EV maker at $2.7 Bn.

The development comes days after it was reported that founder Bhavish Aggarwal is talking with Catamaran Ventures, the investment firm founded by Infosys cofounder NR Narayana Murthy. At the time, Catamaran was also said to be interested in investing as much as $100-150 Mn, matching Temasek’s investment in the upcoming funding round.

Notably, this might be the last time Ola Electric raises equity funding as a private company as the electric two-wheeler maker started roping in IPO bankers last month for a potential IPO next year.

However, given the time left between now and then, speculation is rife that Ola Electric might file its draft IPO papers early next quarter. 

The speculation around a mega funding round also comes as Ola Electric broke ground on its gigafactory in Tamil Nadu earlier this week. Spread across 115 acres of land, the Ola gigafactory will begin operations early next year with an initial capacity of 5 gigawatt-hour (GWh), to be further expanded in phases to 100 GWh at full capacity.

The government’s move to slash subsidies on electric two-wheelers is expected to have a short-term impact on sales as the market readjusts to higher prices under the new subsidy regime. Even so, the total electric two-wheeler registrations in May 2023 almost reached 1.05 Lakh units, with Ola Electric leading the market with a 27% market share.

The Bhavish Aggarwal-led company is expected to launch a lower variant of its S1 scooter in July, which will be priced below the Ola S1 Air. The company, like its peers, has had to raise the prices of its scooters following the government’s move to slash FAME-II subsidies on electric two-wheelers. Besides, it has also decided to discontinue the smaller 2kWh variant of the S1 Air scooter.