Ride hailing major Ola, which is currently on a fundraising spree, may soon get end up getting a funding lift from Hyundai. Reports are abuzz that the South Korean based auto giant is in advanced discussion with Ola to invest nearly $250-300 million in the company. The investment will give Hyundai a 4% stake in the company and propel Bengaluru based company’s valuation to all time high of $6 bn.
Sources have claimed that Hyundai-Ola deal could be sealed in next coming weeks. Both companies, of course, have chosen to remain tightlipped about fundraising reports.
Hyundai’s fundraising talks have come closely on the heels of Sachin Bansal’s $92 Mn fund infusion in Ola. This funding round went down as a landmark deal as Bansal’s investment is the largest individual investment in India’s startup ecosystem till date.
In Hyundai, Ola’s co-founder Bhavish Aggarwal will find a new ally to curtail SoftBank’s boardroom influence. Since last year Aggarwal has been desperately trying to bring new investors on board in a bid to protect founder’s interest. Bansal’s landmark investment few weeks back was very much an effort to balance SoftBank’s domination.
Auto giants betting big on urban mobility
Auto giants are looking to buck the trend of slumping demands in the global auto market by investing in urban mobility space including the ride hailing industry. This explains the global trend that has seen big names like General Motors, Ford Motor Co. and Toyota Motor Corp invest in popular ride hailing companies like Uber and Lyft.
This same trend is now being enacted in India as well, with Hyundai having already invested in car rental startup Revv in August last year. This means if Hyundai’s funding deal with Ola is sealed then it will be South Korean auto giant’s second investment in India’s startup ecosystem. The South Korean company also owns minority stake in Southeast Asian ride hailing firm Grab.
Bengaluru based car rental firm Zoomcar has also benefited from this global trend. It has raised funds from big auto names like Mahindra and Mahindra and Ford.
The growing commandership between urban mobility companies and auto giants may result in innovative synergy in coming years. This should potentially benefit the urban mobility industry.