India’ largest ride-hailing service and San Francisco-headquartered Uber’s prime competitor Ola has raised $1.1 billion from Chinese composite organization Tencent, Japan’s Softbank and a few other existing investors. This is the largest funding round since the company’s kickoff in 2010. This is the first major raise since November 2015 when the online transportation network company raised around $500 million.
Ola has raised a number of small undisclosed amounts yet the company was valued at as low as $3.5 billion this year. Also, Ola has been planning to raise a total of around $2 billion. Once the financing of $2 billion is finalized, Ola will be valued at around $7 billion.
Ola said that it will use the newly acquired financing to make further investments in supply and technology and innovations to cater the increasing transportation demands of the country. According to the company, artificial intelligence and machine learning will play a crucial role in the achieving the company’s objective.
Ola is in a fierce competition with Uber which hit the Indian roads in the year 2013. However, Ola has a cutting edge over the domain of operation. It currently operated in 110 Indian cities as compared to Uber’s 29. Since a past few months, Uber has been struggling to acquire leadership among its competitors globally. Also, a former Uber employee recently slapped sexual harassment allegations against the company. In certain Asian countries like Indonesia, Malaysia, and India, Uber has been facing allegations of bribery, invasion of privacy, and tax evasion. Considering these scenarios, we can say that the timing of this funding will play a crucial role and help Ola in cruising along and progress.
Tencent, a Chinese giant valued at more than $300 billion is boosting its reach in India by investing in local technology firms who complete with leading global organizations. Recently, it invested $3 billion in Flipkart which provided a launchpad for Flipkart for its competition with Amazon. It also invested a hefty amount in Hike, India’s Whatsapp rival and valued it to $1 billion.
Ola is currently the most popular online transportation platform in India which handles over 2 million rides daily and has a network of around 800,000 drivers.