Published: Wed, October 11, 2017
Money | By Armando Alvarado

Cab rider Ola raises $1.1 bn from venture funds

Cab rider Ola raises $1.1 bn from venture funds

Existing shareholder Softbank and a few other US-based investors also participated in this round.

Today (Oct. 11), Bengaluru-based ride-hailing company Ola announced that it had raised $1.1 billion (Rs7,180 crore) in a funding round led by Chinese internet giant Tencent.

It is reportedly still looking to snag an extra $1 billion (£760 million) in funding on top of the $1.1 billion, which will leave the Indian company worth $7 billion (£5.3 billion). Earlier this year, Uber exited direct operations in Russian Federation.

Ola also runs solutions like Ola Share and Multimodal Electric Vehicles on its platform.

While Uber faces five criminal investigations, its rival in India is ready to fight. 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. Flipkart is now the world's third-most funded private company. Prior to this round, it has received at least Rs2,345 crore from SoftBank Group Corp. Pre-money refers to the valuation excluding the current round's cash infusion.

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Earlier, we reported that the Bangalore-based cab-hailing service provider was in talks with Tencent, among others to raise about ₹13,000 crore in a new funding round.

According to a Reuters report, Mohit Saraf, a senior partner at Indian law firm Luthra & Luthra, said while SoftBank's Uber investment would spark antitrust issues in India, the CCI would need to assess whether Uber and Ola dominate the overall taxi market which is replete with local operators of yellow-and-black coloured cabs.

Uber's prices in India are generally lower than Ola's, an advantage in this price-sensitive country. Uber claims it is bigger than Ola, but executives and investors at Ola claim that Uber is less than half of Ola's size.

With its latest round of funding, Ola will be making strategic investments in supply, technology, and innovations to build for the unique transportation needs. Ola will also invest in increasing its fleet of vehicles and presence in Indian cities, where it is already not present.

Tencent President Martin Lau said as Ola's offerings were tailored to meet the country's transportation needs, the partnership would enable his firm to be part of the growing ride-hailing space. Tencent, for example, has invested in similar start-ups to Ola such as Indonesian ride-hailing app Go-Jek.

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