Ola In Talks With SoftBank To Raise $500 Mn To Take On Uber

Online cab aggregator Ola is reportedly in talks with SoftBank to raise up to $500 Mn in a fresh round of funding to compete with its nemesis Uber.

However, the terms of the investment are still unclear.

This development comes a short while after Uber surrendered its Chinese market. Struggling to keep up with the competition in the Chinese taxi market, Uber Technologies Inc. decided to sell its China business to rival Didi Chuxing.

Founded by Bhavish Aggarwal and Ankit Bhati, Ola has cumulatively raised $1.25 Bn from investors such as Tiger Global, DST Global, and Softbank among others. Ola’s last round of funding took place in November 2015, where it raised $500 Mn in its Series F funding round at a valuation of $5 Bn.

Earlier in June 2016, reports surfaced that Ola was in talks with its existing and new investors to raise $300-400 Mn this 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.

Ola has also held early-stage discussions with automobile giant General Motors. Bhavish Agarwal met GM’s CEO Mary Barra a few months ago but the talks may not result in an investment, said sources close to the development.

SoftBank has recently invested $750 Mn in Singapore-based online taxi-hailing platform Grab. If the deal with Ola falls into place, it is speculated to be the largest deal by SoftBank in India, according to sources.

Ola is also planning to officially launch a formal fund-raising process in the near future in order to attract other investors as well to lead the round. “SoftBank is very keen on backing Ola but there are chances of a new investor coming in as well,” added the sources.

In June 2016, Uber announced that it was pumping in $6.4 Mn in its cab leasing partner Xchange Leasing to strengthen its supply. Earlier this month, Uber announced that India is number two (after the US) in the number of rides taken via Uber and that it has surpassed Ola in the number of rides taken.

This development was reported by ET.