The company's AI-based platform has seen increased interest during the COVID pandemicRead more...
Ola, the largest taxi service in India, hopes to be in 200 cities by the end of the year
As Uber continues to try to expand in India, amid mounting pressure from authorities, its biggest rival in the country isn't waiting around to see what will happen. It is looking to put distance between the two companies once and for all.
Ola, the Indian Uber, just raised a $400 million Series E funding round, according to various news sources, including VentureBeat. The round was led by DST Global, and included funding from GIC, Falcon Edge Capital, along with previous investors such as SoftBank Group, Tiger Global, Steadview Capital and Accel Partners.
The company had previously raised $276 million in funding, including a $210 million round from SoftBank Internet and Media in October of last year..
The funding will also help pay for Ola's first acquisition, picking up rival on-demand taxi company TaxiForSure last month for $200 million.
It also plans to use the money for expansion; it has already grown from 10 cities to 100 in the past year, and hopes to be in 200 by the end of this year. Uber, by contrast, is only in 11 cities in India, though that still makes it the company's largest market outside of the United States.
“DST Global, GIC and Falcon Edge have been partners in some of the leading Internet success stories globally and we are excited about having them onboard," Bhavish Aggarwal, the Co-founder and CEO of Ola, said in a statement.
"Our vision is that people shouldn’t find the need to own a car. And we have been able to make this possible for millions of customers in the past four years by creating over a hundred thousand driver entrepreneurs on the platform."
The company also likely sees an opening to pull away from its rivals, as Uber's presence in India has become complicated following an incident in New Delhi in December, where a passenger was allegedly raped by a driver. This caused the service to be sued, as well as banned in that city, and in Hyderabad. The company has since strengthened its safety and security features in response. That included enhanced driver screening through tools like biometrics and voice verification, and stricter background checks on drivers.
Uber restarted services in the capital earlier this year, even though New Delhi said it was still banned in the city. Ola was also bannedin New Delhi, yet also still remained in operation as well.
Both companies received lettersfrom Delhi’s state Transport Department this week, warning them that their applications for radio-taxi licenses would be in jeopardy if they did not stop picking up passengers before those licenses were processed.
Despite all of its setbacks, Uber is not giving up on India. It recently partnered with, and took some money from, Times Internet to expand its presence even further. Ola likely has nothing to worry about when it comes to competition, though, as it is the country's largest taxi hailing service, with over 100,000 vehicles across 67 cities. It averages over 200,000 rides daily.
The Indian tech scene
There was a flurry of activity in India in the last year, and this year is looking to be no different. The investment in Ola was just the latest big funding venture funding round for the Indian tech scene.
Two companies in particular raised funding in the billions of dollars last year, Flipkart, which is also the largest e-commerce company in India, raised nearly $2 billion in three rounds.
First it picked up a $210 million investment led by DST Global in May and then the aforementioned $1 billion round, led by Tiger Global and Naspers, in July. It raised another $700 million to close out the year.
Meanwhile, Snapdeal, which is one of Flipkart's biggest rivals, raised at least $860 million in four rounds in 2014.
The first investment in the company was in a round led by eBay in February, in which it invested $133.7 million. The round also included Kalaari Capital, Nexus Venture Partners, Bessemer Venture Partners, Intel Capital and Saama Capital. That was then followed by another $100 million from Temasek, BlackRock, Myriad, Premji Invest and Tybourne in May, and then an undisclosed personal investmentfrom Ratan Tata in August. The company then added another $627 million from Softbank in October.
Both of those companies will have to deal with Amazon, which announced in July that it was going to be investing $2 billion in its Indian operations.
2014 was also the year that Facebook hit the 100 million user mark in the country, giving it the second largest base of Facebook users in the world.
Last year ended with News Corp. purchasing financial planning service BigDecisions.com, which followed News Corp's first investment in India in August, when it participated in a $37 million round for PropTiger, an online real estate marketing platform in India. In all, News Corp. acquired a 25% stake in the company.
2015 has seen some big moves in India as well, with Twitter acquiring Indian marketing and analytics platform ZipDial in January, and Google choosing India as the first international headquarters for Google Capital. The firm had already put an undisclosed amount of funding into CommonFloor in January.
Last month Accel Partners, which just put money into Ola, announced a new $305 million fund to focus on the country, called Accel India IV.
VatorNews has reached out to Ola for confirmation of the round, as well as any further information about its future plans. We will update this story if we learn more.
(Image source: olacabs.com)
Read more from our "Trends and news" series
The company was founded by Braintree's Bryan JohnsonRead more...
The company saw engagement with its platform grow 139 percent in the first half of 2020Read more...
Related Companies, Investors, and Entrepreneurs
Joined Vator on
Uber is a ridesharing service headquartered in San Francisco, United States, which operates in multiple international cities. The company uses a smartphone application to arrange rides between riders and drivers.