Ola losses tripled to ₹2,313 cr in FY16 despite growth in revenue
Ola Cabs, which is run by ANI Technologies Pvt. Ltd, reported a seven-fold revenue growth in the year ended March 31 2016, but losses nearly tripled at India’s largest cab hailing start-up on the back of heavy discounts to customers and spending on incentives to its drivers.
According to regulatory documents sourced from data platform Tofler, Ola posted revenue of ₹758.23 crore in 2015-16, compared with ₹103.8 crore in the year-ago period. Losses nearly tripled to ₹2,313.7 crore from ₹796 crore in the same period.
However, the revenue figure Ola reported for the 2014-15 financial year in the latest regulatory filings appears to be different from the number it reported last year.
Last year, Mint reported that Ola registered an eight-fold jump in revenue, driven mainly by discounts and driver incentives that in turn was fuelled by two large funding rounds that helped it widen its lead over arch-rival Uber Technologies Inc. Ola at the time had reported full-year revenue of about ₹418 crore in 2014-15, according to filings that the company posted in June last year. However, in the latest filings, Ola has said it posted revenue that was nearly a quarter of that figure at ₹103.8 crore.
According to the regulatory filings sourced from Tofler, Ola has changed its revenue reporting structure. While earlier the entire fare paid by customers was counted as revenue, from this fiscal, only commissions on each fare is being counted as revenue. As a result of this change, Ola has restated 2014-15 revenue figures from ₹421.72 crores to ₹103.77 crores. Mint reached out to Ola for a clarification on the numbers and an explanation on the disparity between the two figures, but the firm did not immediately respond to requests for comment. Cabhailing services like Ola and Uber generate revenues from the commission charged from drivers.
Ola is currently locked in a bruising market share battle against US-based Uber, which has witnessed exponential growth over the past three years in India. After losing ground to Uber in 2015, Ola recovered last year after launching Micro, its cheapest offering so far. Ola claims it is twice the size of Uber, whereas the numbers disclosed by the latter indicate that the two are running neck and neck.
The outcome of this battle— along with a similar battle that is currently playing out in the online retail market between homegrown “unicorn” startup Flipkart against e-commerce giant Amazon—could well define the future of India’s fast-growing startup ecosystem.
To fight off Uber, Ola has turned to its deep-pocketed investors, mainly Japan’s SoftBank, to raise funds that will help fuel its growth and expansion. Ola has so far raised nearly $1.5 billion over the past three years from a clutch of investors such as SoftBank, Sequoia Capital, Accel Partners and DST Global and is presently in talks to raise even more.
Ola, which has been trying to raise fresh capital since last June, is in talks with new investors to get at least $500 million more, Mint reported then. If Ola gets new investors, SoftBank will invest more in the company.