Ola to invest $500 million to foray into self-drive services

Ola will reportedly deploy nearly 10,000 vehicles including luxury sedans and SUVs in major cities over the next few months.
Ola to invest $500 million to foray into self-drive services
Ola to invest $500 million to foray into self-drive services
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Self-driven cars could be seen more frequently on Indian roads with leading ride-share cab aggregator Ola entering this space. A report in Economic Times states that Ola is planning an investment of $500 million for this and that Ola plans to press into service 10,000 self-drive cars in the country, which could be a mix of SUVs and premium segment vehicles.

The company confirmed to ET that they have such plans and will work on the kind of feedback they are receiving from the market. And it is also learnt that Ola would be looking at all the avenues such as rentals, corporate leasing as well as subscription basis.

The funds to be raised for this new SBU will be in the form of debt and equity and the entity to raise these financial resources will be Ola Fleet Technologies. Ola’s existing investors are the high profile SoftBank Group from Japan and Tiger Global from the US, apart from many others. The company is currently valued at $6 billion and it has already raised funds to the extent of $3.61 billion so far. In its last effort at inducting capital Ola had roped in automotive major, Hyundai and its group firm Kia Motors. These South Korean companies are likely to build cars for Ola with the designing meant to address the specific needs of the cab aggregator. Whether the self-driven cars will also be part of this arrangement is not clear yet.

There has been an increased interest self-driven car operators in the country with players such as Zoomcar, Drivezy and Myles. These are startups and investors have backed them as well. But if Ola’s plans are rolled out as above, then it might emerge the largest operators of self-driven cars.

This move by Ola has be seen in the larger perspective of the company wanting to broad-base its business and not overly depend on the ride share cab operations. For the record though, Ola claims they have either broken even or making a small profit on a per-trip basis from the last few months.

Image source: Industry sources

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