Ola Looks To Raise $300 Mn To Take On Rival Uber

Ola is currently in talks with both its existing and new investors to raise $300-400 Mn this year.

Ola gained its last funding of $500 Mn in November last year from Baillie Gifford, Didi Kuaidi and existing investors Falcon Edge Capital, Tiger Global, SoftBank Group, and DST Global. To date it has raised over $1.2 Bn funds.

However, with Uber increasing its share of pie from mere 5% a year ago to 40% in early January, things became tough for Ola.

High cash burn rate forced Ola to consolidate its businesses resulting into shut down of OlaStore and OlaCafe and focus on its core. Also, there was need to revise its product strategies and regain its lost market share to reduce losses and make grounds for next funding.

Ola launched its Micro cab service in March this year, which led to dramatic increase in its market share, considerably widening the gap against its rivals, as cited by one of the sources to Mint. “Ola has also realized that it cannot slip with Uber sniping away at its heels. It’s an important lesson from last year and Ola is going to be stronger for it,” as per Mint

Recently, Uber announced to pump in $6.4 Mn in its cab leasing partner Xchange Leasing to strengthen its supply. In March 2015, it entered into a strategic partnership with Times Internet with a deal size of INR 150 Crores. Also, earlier its parent company in US, raised $3.5 Bn investment from Saudi Arabia’s sovereign wealth fund, making Uber India the biggest bidder in line to get ahead of its rival Ola.