Ola plans to go Dutch on investor hunt
Bhavish Aggarwal-led Ola is planning to go to Amsterdam soon, it is learnt. The cab aggregator, which started its global foray with Australia early this year and then added the UK on the Ola map soon after, wants to reach 50 international cities by 2019.
Uber’s rival is looking at more than just geographical expansion. Its global ambition is an attempt to find a clutch of investors, who could help it raise another round of capital, people in the know said.
“Currently, Ola does not have an update on new launches,” said an Ola spokesperson.
Amsterdam, with a good public transport system, is important for Ola. While trams, buses, and cycle lanes make travel easy and the need for cabs is already being met by the existing services, both Uber and Ola have their eyes trained firmly on the city. The top reasons include the big-ticket sizes in the city. “When people do take rides, the fares are higher and it is all a matter of creating habit,” says an executive at one of the two cab companies.
The geographical reason is compelling. Uber has been using Amsterdam as the base of operations for its Central, Northern and Eastern European, and North Africa operations. Amsterdam’s location gives its executives easy access to most cities in the European Union. Ola wants to follow a similar path.
Sources pointed out Ola couldn’t step out earlier as the global anti-Uber alliance came in the way. The alliance was broken when SoftBank decided to buy an equity stake in Uber last year.
It further dissolved when Singapore-based Grab merged with Uber in Southeast Asia. That cleared the road for Ola.
Currently, apart from Uber, Ola will compete with Taxify, an Estonia-headquartered unicorn which raised money from the likes of China’s Didi Chuxing and Daimler. In certain East European countries, where Uber has been banned, Taxify is a virtual monopoly in app-based ride-hailing services.
In addition, Ola has obtained the licence to operate in London and plans to grow within the UK much more aggressively. For instance, it’s looking at Ireland as a market, with Dublin being the first destination.
Apart from Europe, Ola’s scheme of things would have Dubai and South America as well. The Dubai plans are much more advanced than the South American, one of the sources contacted for this report said.
Ola Chief Executive Officer Aggarwal is waiting for the Careem-Uber deal to go through before entering the market.
“Uber is in 600 cities globally. If Ola needs to show itself as a competitor to the US cab aggregator, it must expand its presence internationally,” said another source.
But, there’s more. For the last one-and-a-half years, Ola has been trying to find a major investor or a consortium of smaller investors who can buy out SoftBank Group’s 26 per cent equity stake in the firm, at least two sources pointed out. By next year, SoftBank wants Uber and Ola on the negotiation table for a possible merger, they added.
Uber has already made it clear after the Grab deal that it would not accept any merger where it has to make do with a minority stake. Uber’s top boss Dara Khosrowshahi, during his visit to India a few months ago, had said the company’s deal with Singaporebased ride-hailing firm Grab was the last time it has a minority stake after a merger anywhere in the world.
He indicated that in case a merger with Indian rival Ola happens, Uber would be the majority partner, according to sources close to the US-based company. Quelling fears of a takeover by Ola, Khosrowshahi said the company was not ceding its position in India, a core market for the company.
Ola has been at loggerheads with SoftBank for long. SoftBank wants Ola to merge with Uber, so that it can consolidate the cab aggregation sector in India just as it did in Southeast Asia, according to sources.
Ola is also in talks with South African internet conglomerate Naspers to raise funding at a valuation of $8 billion as well as with Singapore’s Temasek Holdings and two other funds for a billion-dollar funding.