Taxi For Sure, the second largest taxi aggregator in the country behind Ola, sees a lot of synergy in its acquisition. In an interaction with FE’s Sayan Chakraborty and Anand J, founder and CEO Raghunandan G, talks about the role of founders in the merged entity as well as the growth prospects of Ola post the acquisition.
What synergies will both companies draw from this M&A?
There will be several synergies TaxiForSure will draw from the acquisition. Firstly, the operators would benefit from being part of a larger ecosystem and an increased scale of demand. TaxiForSure can focus on building value for consumers and drivers instead of worrying about competition. Besides, organisational resources on raising capital can be saved for TaxiForSure. Ola will benefit from different supply and distribution model and can focus on economy segment cab consumers. Besides, it will now have an access to the second-largest network of cabs and innovative categories like Nano and autos, besides gaining a great team.
Given that TFS was a close second to Ola, why did you go for an M&A?
TaxiForSure is a fast growing startup and we were in talks to raise our next round of funding. However, such a move is good for all stakeholders. This merger helps in synergies that will benefit customers and driver partners who are both key to the ecosystem.We see clear benefits in the complimentary value that this merger brings in. There will be more availability and a better experience in the marketplace model owing to the complimentary value in terms of drivers, customers and other stakeholders. We are growing really fast and an acquisition is an inorganic growth path that further accelerates this.
Will any of the investors exit from TFS? How much was TFS paid in cash?
TaxiForSure investors have now rolled over their stock into Ola. The overall deal size was $200 m and it is a combination of cash and stock.
How long will TFS founders work with the merged entity?
The TaxiForSure founders bring valuable experience to the table and they have built TaxiForSure into what it is today. Arvind Singhal who was the COO will now lead TaxiForSure as the CEO. Both founders will be involved in an advisory capacity for a certain period. The leadership team remains intact.
What kind of back-end integration will follow the announcement?
At the ground level, nothing changes for driver-partners on the TaxiForSure network because of this acquisition. However, this also gives both brands a great opportunity to work together to allow only high quality, well trained, verified drivers who have clean record and performance. This will benefit the ecosystem at large. The acquisition opens up opportunities to work together at multiple levels and a lot of cross learning for teams on both sides. Over all, nothing changes in terms of technology or even operationally for customers and drivers.
How do you see Ola doing post the acquisition?
Ola will benefit with the complimentary value added from TaxiForSure’s supply and demand proficiency which is pretty different from Ola’s. Great team working together with a shared vision! The acquisition gives a great scope for cross learning and working together at multiple levels for both teams. This will bring in more availability and a better experience in the marketplace model owing to the complimentary value in terms of drivers and customers.