Microsoft could invest $50-100 million in Ola
BENGALURU: Microsoft Corp. could invest $50-100 million for a small stake in ANI Technologies Pvt. Ltd, which runs Ola, in a deal that could see the ride-hailing service switch to Microsoft Corp’s Azure cloud platform from Amazon Web Services (AWS), two people familiar with the matter said.
Microsoft chief executive Satya Nadella has been pushing Azure in India to grab market share from AWS and others.
In February, Microsoft had announced a long-term cloud services deal with Flipkart Ltd; Microsoft later invested about $200 million of the $1.4 billion round raised by the online retailer.
Ola is in the middle of a fund raise. The home-grown online taxi firm, the third-most valuable start-up in the country, has been trying to raise fresh capital since June 2016.
It has so far received ₹2,345 crore from SoftBank Group Corp. and others in the latest round and is in talks with investors to get more cash.
Ola got a pre-money valuation of roughly $3-3.3 billion in the latest round, a sharp drop from the $4.5-billion valuation it commanded in September 2015.
Pre-money refers to the valuation excluding the current round’s cash infusion.
“The talks with Ola are in very early stages. More than the money, it is more about Nadella’s vision of partnering with more and more large technology companies in India and establish Azure as service of preference. Microsoft is likely to invest in Ola but a term sheet is yet to be issued,” one of the two persons cited above said on condition of anonymity.
Ola needs massive amounts of capital as it is locked in a bruising battle with the local unit of Uber Technologies Inc., the world’s most valuable and deeppocketed start-up.
After it sold its Chinese business to Didi Chuxing in August, succeeding in India became one of the top priorities for Uber.
Uber claims it is bigger than Ola but executives and investors at Ola claim that Uber is less than half of Ola’s size.
Uber India president Amit Jain said in an interview in September 2016 that Uber’s completed trips had risen from 1.6 million in January 2016 to 5.5 million at the end of August 2016.