Ola raises $50 mn from 2 new Chinese investors
India’s largest cabhailing service Ola has raised $50 million at a valuation of roughly $4.3 billion from Hong Kongbased Sailing Capital and the China-Eurasian Economic Cooperation Fund (CEECF), as part of the SoftBank-backed startup’s move to raise fresh funds of at least $1 billion.
Sailing and Chinese statebacked investment fund CEECF will jointly hold a stake of over 1% in Ola, implying that the latter’s valuation has inched up since its previous fundraise, according to regulatory documents filed with the ministry of corporate affairs that were sourced by business intelligence platform Paper.vc.
Last year in October, Ola, developed by ANI Technologies Pvt Ltd, raised $1.1 billion in fresh funding at a valuation of $3.5-4 billion from China’s Tencent Holdings Ltd and existing investor SoftBank Group Corp. of Japan, and had indicated that it was in talks to raise another $1 billion from new investors.
Ola is expected to raise fresh funds over the coming months from new investors, including Singapore’s Temasek, which has alreadyboughtsecondaryshares in the Indian origin online transportation network company, according to at least two people aware of the latest discussions.
Mint first reported in July that Temasek had bought shares worth at least $30 million from former and early employees of Ola as part of a secondary share sale.
The latest fundraise from the two Chinese investment firms comes at a time when Ola is aggressively expanding outside and within India, while also building up a strong food-tech business that can compete against Swiggy and Zomato, as the Bengaluru-based cab-hailing service looks to fortify its lead against arch-rival Uber Technologies in India.
To keep up this aggressive pace of expansion into new geographies and businesses, Ola will need to consistently raise fresh funds from new and existing investors, at a time when India’s start-up ecosystem is witnessing a massive upsurge in funding momentum. So far, Ola has raised roughly $2.5 billion in funds since starting out in 2011 and is India’s second-most valuable internet start-up after e-commerce payment system and digital wallet company Paytm, whose parent company is One97 Communications Ltd. More importantly, Ola needs to have massive amounts of capital at its disposal to fight Uber, which is easily the most deep-pocketed start-up in the world and also counts SoftBank as an investor.
In April, Mint had reported that Ola may raise funds separately for Foodpanda later this year to tap the strong investor demand for food-tech start-ups.
Apart from its push to raise fresh funds at a higher valuation, Ola co-founder and ECO Bhavish Aggarwal has also been in the middle of an ongoing boardroom tussle against its largest investor, SoftBank. Mint reported in May that SoftBank was in the midst of a boardroom battle with Aggarwal, after he had blocked a proposed deal involving Tiger Global Management selling part of its stake to SoftBank.
BENGALURU: