Taxi aggregator Ola, run by ANI Technologies, has raised $104 million (Rs 670 crore) from existing investors Falcon Edge Capital and Ratan Tata’s RNT Capital Advisers, in a fresh round of funding. While Falcon Edge has infused Rs 402 crore, RNT Capital has invested Rs 268 crore, filings with the Registrar of Companies show. ANI Technologies sold more than 4.9 lakh of shares, each with a face value of Rs 10, at a premium of Rs 13,511 per share. The investment comes close on the heels of Ola raising $250 million (Rs 1,675 crore) from Japanese telecom and internet major SoftBank; the transaction had valued the firm at $3.5 billion.
Despite some regulatory problems with the government — on surge pricing and licensing — and some issues with drivers relating to their incentives, the ride-sharing market in India has been growing fast and is seen to have tremendous potential.
While the app-based cab market accounted for barely 6-7% of the overall B2C taxi market in India in 2015, it was estimated to be clocking a growth rate of 25-30% quarter-on-quarter, according to Redseer Consulting. At the end of 2015, Ola was believed to be the market leader with a share of 50% while Uber was estimated to have a share of close to 26%. However, with the launch of cash payments in September 2015, the pace of growth at Uber is understood to have accelerated.
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Indeed, Ola’s net losses for 2015-16 trebled to Rs 2,311 crore as it spent heavily on promotions and incentives. Uber has just launched a food delivery service. The Indian market, of course, is way smaller than that in China with the annualised GMV run rate for the three months to March 2016 at $1.15 billion. The number of daily rides was just 1.2 million in Q12016 with the service available across 102 cities. The total number of taxis on cab-based platforms at the time was around 3 lakh.
The mop-up by Ola comes amid media reports that Chinese ridesharing giant Didi Chuxing is raising between $5 billion and $6 billion at a valuation around $50 billion; the investors that may participate in the funding include SoftBank, Silverlake and China Merchant Bank.
Last month, Uber’s US rival, Lyft, raised a new $500-million round of funding, boosting its valuation to about $7.5 billion. Among Ola’s well-known shareholders are SoftBank, Didi Kuaidi and Tiger Global. Ola recently announced the roll-out of electric cars on its platform and it is planning to pilot a few thousand electric cars in several Indian cities this year. Ola claims to have more than 4,50,000 vehicles on its platform, including cabs, autorickshaws and regular black-and-yellow label cabs.