You can’t hold SoftBank from making more investments in Indian startups and the Japanese investor is showing renewed interest in investing in Ola, the ride-hailing cap operator. SoftBank already holds around 26% in Ola and the founder, Bhavish Agarwal has been wary of allowing SoftBank to up its stakes and make him lose control of the decision-making rights at the Board level. This story has already been much written about and how Agarwal has sought help from Flipkart co-founder Sachin Bansal to put in $100-150 million and getting the Board to pass a resolution to pre-empt any manoeuvring by SoftBank to take control.

But apparently, things have cooled down and though SoftBank is willing to invest up to $1 billion, Agarwal might settle for a lower amount to be invested by the Japanese company while continuing to protect his rights to call the shots. He has reportedly acquired enough voting rights from other investors to ensure nothing untoward happens. There may be one or two new investors added to the existing ones too, it is being reported.

In terms of the shareholding pattern in Ola, the founders would have about 11%, Sachin Bansal and Singapore’s Temasek Holdings together around 7-8%. Another investor, Yuri Milner of Russia through his investment arm DST Global, who holds about 6% has divested his voting rights in the venture to Agarwal. These add up to around 25% to SoftBank’s 26%. Observers say this position has given Agarwal the elbow room to accept more investments from SoftBank. None of these developments have received official confirmation from either party involved.  

There are also reports of Ola planning to diversify into e-pharmacy, a business that is suddenly seeing many players entering and which does have substantial profit margins on offer. The cab aggregation business may have its limitations and there is the need to expand horizontally and the funding exercise may be aimed at addressing this need. According to information available, Ola and its rival Uber had it good for two years, 2016 and 2017, clocking 90% and 57% year-on-year growth in business. But the year 2018 has seen this growth rate dropping. The base has expanded and so, the percentage could be lower, but one may not be surprised if there is a sense of saturation in the business and such high growth rates cannot be taken for granted.

Having diversified into food delivery with Foodpanda, pharmacy is the next area the company is looking at.