Having raised close to $800 million since its inception in 2011 from marquee investors like DST Global, which is also an investor in Flipkart...
Having raised close to $800 million since its inception in 2011 from marquee investors like DST Global, which is also an investor in Flipkart, Ola has positioned itself as a consumer internet company on a par with the e-tail bandwagon. The company, in the latest round of funding, was valued at $2.5 billion. Co-founder and CEO Bhavish Aggarwal tells Sayan Chakraborty about the company’s plans to expand into 100 more cities by the end of the year, build a sound driver ecosystem and maintain its position as the market leader, ahead of San Francisco-based behemoth Uber.
What will be key areas of focus post the $400-million funding round?
We are present in 100 cities right now and the target by the end of the year is 200 cities. We will also scale up our offerings in the existing cities, like autos, minis, etc. We have significant expansion plans. We had recently launched Ola cafe which is on a pilot right now. We will also scale it up. The pilot has seen good customer traction and demand.
How has the response been to Ola’s services in tier II/III cities?
Tier II/III cities have responded very well. The public transport infrastructure is kind of broken in these cities and the population density is as high as any other city. Hence, the opportunity is huge. The contribution of tier II/III cities to our overall bookings is relatively smaller, but they have been growing very fast.
How is Ola faring against its rivals?
We like to focus on our customers. As long as we are delivering value to our customers, we will be able to grow our market share. We are in a strong leadership position right now and innovating much faster than the competition in both technology and business. We have launched multiple innovative categories and products. I am very confident that we will continue to maintain the lead.
What part of the fresh funds will be spent on building driver ecosystem?
A significant part of the funds will be spent on building the driver ecosystem and we will be investing more on Ola Pragati and Ola Stars. Our focus has always been on enabling more and more driver entrepreneurs. We plan to have one lakh driver entrepreneurs by the end of 2016. We plan to increase the number of drivers on our platform from the present 1.2 lakh to a million in the next two to three years.
How has predatory pricing and discounts played out in the sector post your acquisition of TaxiForSure?
For the consumer, we will continue to offer the best rates possible. We will ensure the benefits of scale and better utilisation of assets are passed on to the consumers. In general, our prices have improved over the time.
Will the massive expansion plans entail a massive hiring drive?
We are hiring very aggressively in the middle- and senior-level roles and we are hiring from across the world. We are on the look out for hiring the best talent. We are getting a lot of interest from some really senior people across the world. We have around 6,000 employees right now, including the TaxiForSure team.
How do you plan to grow TaxiForSure?
We will invest in TaxiForSure. They have build a very good value for money brand over the years. Ola and TaxiForSure have very complementary focuses. Their strategy on the supply side of working with operators is very complementary to Ola’s.
How far are you from profitability?
If we want, we can be profitable very soon. But, we are investing for growth and growth has been very aggressive. At the right time, we will turn profitable, but don’t have a timeline right now.
Has the customer acquisition cost come down for Ola recently?
Our customer acquisition cost is very competitive in the industry.
What prompted you to opt for another funding round so soon?
There is a lot of investor interest and confidence around what we have done. We are in a leadership position now. While we didn’t need the funds immediately, it was good that companies of the stature of DST Global showed interest in us. We were well-capitalised earlier. We were not in the market to raise capital, but DST understood our road map and our vision. That’s the reason why we went ahead with DST.