The round also saw participation from its existing investor- SoftBank Group and other new US-based financial investors. Ola also said that it is in advanced talks with existing and another investor to raise additional $1 billion, thus rounding off what may turn out to be a $2 billion funding round.
After a billion scale funding received by Flipkart and Paytm, Ola is the third one to receive such massive funding this year. Flipkart leads them by having raised at least $2.8 billion in two separate tranches from SoftBank, Tencent, eBay and Microsoft, followed by Paytm which raised $1.4 billion from SoftBank.
“We are thrilled to have Tencent Holdings join us as new partners in our mission to build mobility for a billion Indians. The transportation and mobility industries are seeing huge changes globally. Our ambition is to build a globally competitive and futuristic transportation system in India that will support and accelerate a nation on the move. Our new partners share our passion for building the future of transportation in India together and we look forward to learn and benefit from their global perspectives and ecosystems,” said Ola co-founder and chief executive officer Bhavish Aggarwal in a statement.
Prior to this round, Ola got a pre-money valuation of roughly $3-3.3 billion, a sharp drop from the $4.5 billion valuation it commanded in September 2015.
These funds are really going to help Ola leave its rival Uber behind in a head-on battle. Uber claims it is bigger than Ola, but executives and investors at Ola claim that Uber is less than half of Ola’s size. There is no conclusive way of checking either claim.
“Ola’s unique local offerings are tailored to India’s burgeoning transportation needs. The strategic partnership with Ola makes it possible for Tencent to be part of the fast-growing ride-hailing space in the country. We look forward to helping Ola further develop India’s transportation solutions,” said Martin Lau, president of Tencent.
Ola will be utilising the funds to improve its supply of drivers, by focusing on the leasing business and increasing the number of drivers attached to this platform. Ola also plans deeper investments in technology, primarily in data sciences and electric vehicle infrastructure.