In an effort to compete with its rival Uber, Indian ride hailing service Ola, is reportedly raising fresh capital of around Rs 650 crore ($100 million). The investment is led by RNT Capital Advisors, a venture fund set up by Tata Sons chairman emeritus Ratan Tata. Olacabs is also said to be negotiating further funding of $200 million from other investors. Also Read - Uber cab service resumed in 31 cities in India with new Lockdown 4.0 guidelinesAlso Read - Uber launches 'Uber Connect' package delivery service to rival Dunzo and Swiggy Genie
RNT Capital is expected to lead the round with an investment of $60 million with the rest coming from New York-based hedge fund Falcon Edge Capital, which is already an investor in Ola, reported ET. Reportedly, if the said deal is finalized, Ola s valuation will rise to $3.5 billion, a small but significant boost to the Bengaluru-based company, which last raised capital from its biggest backer Japan s SoftBank in November 2016 at a valuation of about $3 billion. The Japanese firm had led a $210-million (roughly Rs 1,399 crores) investment in Ola in October 2014 as well. ALSO READ: SoftBank writes down $555 million of its investments in Ola, Snapdeal Also Read - Uber to operate 'Essential' cab service to hospitals and pharmacy stores in 4 cities
The purported funding will also be the first major transaction by RNT Capital, which has set up a $250-million corpus with University of California Investments (UC Investments) to invest in Indian companies. UC Investments, which has announced a venture with Tata in February 2016, manages a corpus of $100 billion across endowment and pension funds. Back in 2015, Tata also made an investment of about Rs 1 crore in Ola s parent company ANI Technologies. Ola has so far raised about $1.5 billion from a clutch of investors including Tiger Global Management, Matrix Partners, SoftBank Group and Didi Chuxing. ALSO SEE: These are the 27 startups Ratan Tata has invested in so far
These reports of capital infusion come at a time when Ola s market share has noticeably improved. And with Ola s plan to work closely with the government and introduce electric vehicles in the top cities in the country in the next three months, it is expected to boost prospects for Olacabs. Under the National Electric Mobility Mission Plan (NEMMP) 2020 and Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME), the government aims to see 6 million electric and hybrid vehicles on the roads by 2020.