India’s ride-hailing startup Ola has secured a whopping $2 billion in new funding from a group of investors including SoftBank Group Corp. and Tencent Holdings Ltd, Bloomberg reported, citing a person familiar with the deal. The person further revealed that the funding round hasn’t been completed yet and there’s a strong chance that the $2 billion will rise towards the end.
Other backers in the latest funding round included a venture capital fund jointly run by Indian industrialist Ratan Tata and the University of California’s investment arm, as well as several U.S. institutional investors. The fresh round of investment has pegged the Bangalore-based startup’s valuation at more than USD 3.8 billion.
Founded by Bhavish Aggarwal and Ankit Bhati in January 2011, Ola has raised $3.9 Bn in 11 funding rounds from about 20 investors. The funding round of $350 Mn raised in February 2017 took its valuation to about $3.5 Bn. Later in June, the cab booking platform reportedly picked up about $50 Mn funding from hedge fund Tekne Capital Management, as an extension of its ongoing round.
Ola currently covers 102 cities in the country compared to Uber’s 28. The company claims to have registered over 500,000 vehicles on its platform and offers a wider range of vehicle options than Uber. Further, the $2 Bn funding will help Ola to expand its fleet of vehicles and bolster its core technology platform. A portion of the funding will also be spent on onboarding drivers, especially in tier II cities across the country.
The cab-hailing category is seeing a rapid increase in India, currently, it accounts for $10 billion. According to the several reports, Ola was the market leader in August having completing approximately 1.5 million rides per day whereas Uber had 1.3 million per day. However, the competition is set to get tougher in the Indian cab aggregator space.