India’s cab hailing startup, Olacabs, is reportedly amid conversation with Singapore’s sovereign wealth fund Temasek, and other investors in order raise $500 million-$1 billion. If the deals goes through, it would mark the first major liquidity event for Ola.
According to ET, “The deal, expected to value Ola at $6-7 billion, would include a secondary sale of shares by a slew of investors.” Reportedly, the selling shareholders include angel investor Rehan Yar Khan and the investors who got stocks in Ola after its acquisition of Taxiforsure in 2015. These investors include venture firms Accel India, Bessemer Venture Partners, Helion Venture Partners and the Taxiforsure founders Aprameya Radhakrishna and Raghunandan G.
The mentioned firms have mandated a local investment bank, and the secondary block is pegged at $150 million for a stake of over five percent. Simultaneously, there are negotiations being held regarding the primary stake. Both the deals are expected to come through parallely so that the incoming investor would gain a sizable stake in the company.
Interestingly, Temasek is also an investor in Uber’s Southeast Asia rival Grab, and it could help Ola turn up pressure on Uber, which has to cut losses before an initial public offering of its shares next year.
After Ola raised $400 million from Chinese internet conglomerate Tencent in September 2017, it was valued at $4 billion. Last November, SoftBank also pumped $1.1 billion into Ola, which it aimed at developing more cutting-edge technology, especially machine learning and AI.
Back then, Ola had said in a statement that it was in talks with other investors to close an additional $1 billion as part of the current financing round, which could be a hint at the now close-to-final deal with Temasek.
At present, Ola operates in 110 cities across 14 categories, including auto rickshaws and electric vehicles. Ola is rumored to be scouting for entry points in Sri Lanka and Bangladesh, as part of its international expansion. A section of the funds would likely be directed there.