Homegrown ride-hailing firm Ola has raised $400 million from Chinese internet giant Tencent (backer of Alibaba). The investment has been made through Copper Technology a Singapore-based firm owned by Tencent revealed a filing with the Registrar of Companies. This takes the total amount raised by Ola in the last one year to $800 million. The investment would give Tencent (via Copper ) a 9.57 percent stake in Ola. Also Read - PUBG Mobile’s Indian version Battlegrounds Mobile India must be banned: AP MLA writes to PM ModiAlso Read - Ola to offer free oxygen concentrators to the needy
Ola would use the funds to push its electric vehicle rollout. “The investment has been completed and the understanding is that a sizeable portion will be allotted towards boosting the electric vehicle segment,” an official reportedly said. Part of it could also drive its international expansion. Ola is said to be considering a launch in the neighboring countries of Sri Lanka and Bangladesh. At present, Ola operates in 110 Indian cities. ALSO READ: Ola scouts for operations head in Sri Lanka and Bangladesh; hints at international expansion Also Read - ByteDance acquires popular gaming studio Moonton to take on Tencent
The latest funding values the startup at a little under $4 billion. Ola counts Japan’s SoftBank among its key investors. SoftBank has backed the Bengaluru-based company since 2014, and was reportedly joining hands with Tencent and a clutch of US investors to infuse an additional $2 billion in the taxi aggregator. SoftBank has also in the past expressed interest in helping Ola and Uber “ride together” in India, hinting at its interest in the global ride-hailing major too. Uber, meanwhile, completed 500 million trips in India earlier this year. Now, with Tencent’s investment, SoftBank’s stake in Ola that earlier stood at 40 percent would come down. ALSO READ: Ola raises $2 billion from Japan s SoftBank, China s Tencent and others: Report
Reports estimate that Ola complete about 1.5 million rides daily, slightly more than what Uber does. Its Ola Share and Ola Auto segments are particularly paying off well, possibly because Indian riders are value-conscious. Ola’s revenues jumped seven-fold in 2016, according to regulatory filings with the ministry of corporate affairs. However, its losses widened as well, as it continued to spend aggressively on marketing, promotions, driver incentives and other offers to take the competition to Uber. Some of the new money could ease that pressure now.