Leading home-grown cab aggregator Ola has raised fresh round of funding in the range of $300-350 million led by its existing investor Softbank in an apparent down round as the valuation of the company is estimated at $3.5 billion from the earlier level of $5 billion.
The latest round of funding of $300 million plus has been led by Softbank and also includes other existing investors, according to sources. Ola has been in the market for raising fresh round of funding over the last six months at a valuation of $5 billion.
However, the cab aggregator could not evince the interest of the investors at a valuation of $5 billion, which was the level when it last raised $500 million in November 2015. Ola did not respond to the e-mail sent by FE seeking their response to this development. An e-mail has also been sent to Softbank seeking their response.
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The company was funded with marquee investors such as Softbank, DST Global, Sequoia Capital and Tiger Global and Baillie Gifford. Ola has raised cumulatively $1.2 billion since its inception. The latest round of funding will come as the much-needed boost for Ola, which is in the midst of a fierce competition with the global rival Uber.
Uber which exited its Chinese operations by selling its business to Didi Chuxing and also led to this global cab aggregator to focus on the Indian market. This could potentially mean Uber devoting further resources into India and it has also allocated part of latest global fund raise for the country. It already has development centre in India
It already has development centre in India Ola and Uber have been engaged in an intense competition in the Indian cab aggregation market with an estimated 1.2 million rides per day through deep price cuts. The deep discounting business model of the taxi aggregators has seen an estimated $40 million cash burn rate by Ola on a monthly basis, according to people familiar with the situation.
Founded in 2010 by IIT-Bombay alumni Bhavish Aggarwal and Ankit Bhati, Ola has operations across 102 cities in India. It has more than 2.5 lakh vehicles on its platform.