In the latest funding boost, Ola has got $300 Mn funding from Hyundai Motors and Kia Motors. This is the largest combined investment by South Korean auto giants till date. This investment is based on the agreement that all three companies will collaborate together to develop unique fleet and mobility solutions; developing India-specific electric vehicles and infrastructure; fostering excellent opportunities and offerings for aspiring driver partners with customized vehicles.
This latest Ola funding is unique in more than one ways. Firstly, the investment marks Hyundai’s entry in India’s burgeoning and fast-growing ride-hailing industry. Secondly, it also marks Kia Motors’ maiden entry in India’s startup ecosystem. It must be noted that Hyundai’s investment in Ola is its second major investment in India, after having recently invested in car rental startup Revv.
Above everything else, Hyundai-Kia’s joint investment will offer big boost to Ola on two important fronts. Not only its funding coffers will further swell to compete well with cash-rich Uber but it will further dampen SoftBank’s chances of boardroom domination.
Ola has been on a consistent pressure on both these fronts. It has sought to address this dual problem by fresh funding from new investors. As part of this solution, Flipkart’s co-founder Sachin Bansal came on board with $92 Mn investment. This investment was also a landmark one as this is the largest individual investment in an Indian startup till date.
Hyundai-Kia, on other hand, will seek lucrative opportunities in ‘urban mobility’ through this investment. Urban mobility industry spearheaded by the likes of Ola and Uber is likely to emerge as a major contender for automobile players. This partly explains the rationale behind several auto giants’ recent investment spree in ride-hailing companies. General Motors, Ford Motors, Toyota Motors and Honda have all taken a bet on ride-hailing companies for long-term purposes.