If the deal goes through, it will be the first major investment by a large auto company into the Bengaluru-based ride hailing company.

Hyundai in talks to invest 250 million in Ola for 4 stake
Atom Fund Raising Friday, March 08, 2019 - 19:47

Auto major Hyundai is likely to make an investment in ride-share company Ola that will give the South Korean company a 4% stake in Ola. The amount to be invested could be around $250 million. A report in Times of India indicates that the talks in this regard are still underway and the official announcement may come through in a few weeks’ time.

From Ola’s perspective, the funding from Hyundai may be part of the larger $400-$500 million funding round the company has on its sights. Part of this round has been met through investments made/committed by Sachin Bansal, the co-founder of Flipkart. Mirae Asset-Naver Asia Growth Fund is another investor expected to make an investment of up to $40 million.

From Hyundai’s perspective, it opens up a new opportunity for selling its cars, both the regular ones, as well as the electric cars. Hyundai has already developed a dedicated electric model Kona EV. In addition, several of its existing models are being developed with a parallel electric variant. The Grand i10 is one such model. In one way, if Hyundai ends up supplying its cars to Ola’s leasing company, Ola Fleet Technologies, then it would be a B2B model, a minor shift in the market paradigm for the automobile companies. In any case, there has been a visible drop in the sales of vehicles all over. And the shared mobility space is expanding. The automobile companies like Hyundai should feel happy that when one avenue drops, another opens up.

Going by the international experience, ride share cab service Grab has funds invested by two car companies, Toyota and Hyundai. 

It may be relevant to recall here that similar action is being seen in the two-wheeler segment with Hero Motors taking a position in Vogo, a bike sharing startup, through its promoters, the Munjal family.

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