Ola gets $1.1b fund­ing; along with Uber, faces Meru hur­dle

Financial Chronicle - - FRONT PAGE - SANGEETHA G Chennai

IN or­der to con­tinue its ag­gres­sive growth in the taxi mar­ket, Ola has raised $1.1 bil­lion in its lat­est round of fund­ing from Ten­cent Hold­ings and Softbank. It is also in the process of rais­ing an­other $1 bil­lion.

The lat­est round of fund­ing in Ola was led by Ten­cent, a lead­ing in­ter­net com­pany in China, and was par­tic­i­pated by ex­ist­ing in­vestor Softbank. With ad­di­tional fund­ing com­ing in, the total fund­ing in the cur­rent round would be over $2 bil­lion. But de­spite the lat­est round of fund­ing, things are not ex­actly hunky dory both for Ola and its ri­val Uber in In­dia.

Both are fac­ing le­gal hur­dles in the mar­ket with Meru Cab ap­proach­ing the Com­pe­ti­tion Com­mis­sion against their “preda­tory pric­ing.” Meru Cabs has filed cases with Com­pe­ti­tion Com­mis­sion against Uber and Ola in six cities. In Ban­ga­lore, Meru has fur­ther ap­pealed to Na­tional Com­pany Law Tri­bunal (NCLT).

“Each city is con­sid­ered as a dif­fer­ent mar­ket and so we have filed six cases. We have con­tended that the taxi ag­gre­ga­tors are us­ing their dom­i­nant po­si­tion and money to adopt preda­tory pric­ing, which elim­i­nates com­pe­ti­tion,” said Nilesh San­goi, CEO at Meru Cabs.

“In the Ban­ga­lore case, though the Com­pe­ti­tion Com­mis­sion ac­knowl­edged that ‘be­low vari­able cost pric­ing’ has hap­pened, In­dian laws in­ter­pret only one com­pany in the dom­i­nant po­si­tion,” San­goi said.

WITH its lat­est round of fund­ing, Ola will be mak­ing strate­gic in­vest­ments in sup­ply, tech­nol­ogy and cut­ting edge in­no­va­tions to build for the coun­try’s unique trans­porta­tion needs. The com­pany will make sig­nif­i­cant tech­nol­ogy in­vest­ments into ar­ti­fi­cial in­tel­li­gence and ma­chine learn­ing ca­pa­bil­i­ties. It also wants to dou­ble its pen­e­tra­tion, the com­pany said. Ola is cur­rently present in 110 cities across the coun­try with over 14 cat­e­gories, in­clud­ing auto-rick­shaws, bikes and dif­fer­ent cab ser­vices.

“We are thrilled to have Ten­cent Hold­ings join us as new part­ners in our mis­sion to build mo­bil­ity for a bil­lion In­di­ans. The trans­porta­tion and mo­bil­ity in­dus­tries are see­ing huge changes glob­ally. Our am­bi­tion is to build a glob­ally com­pet­i­tive and fu­tur­is­tic trans­porta­tion sys­tem in In­dia that will sup­port and ac­cel­er­ate a na­tion on the move,” said Bhav­ish Ag­gar­wal, co-founder and CEO of Ola, adding, “Our new part­ners share our pas­sion for build­ing the fu­ture of trans­porta­tion in In­dia to­gether and we look for­ward to learn and ben­e­fit from their global per­spec­tives and ecosys­tems.”

But the mar­ket views the sit­u­a­tion to worsen fur­ther if Uber and Ola merge into one en­tity. Softbank is the lead­ing in­vestor in Uber’s main ri­vals in many mar­kets. It has in­vested in Didi Chux­ing in China, Grab in South East Asia, 99 in Brazil and Ola in In­dia.

Softbank’s Masayoshi Son had re­cently evinced in­ter­est in in­vest­ing in Uber and this would see these play­ers merg­ing with Uber in their re­spec­tive mar­kets.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.