Ola is raising more funds now as part of its efforts at inducting $1billion in addition to the $1.1 billion it has already raised last year. After Flipkart’s Sachin Bansal committed $100 million, a similar amount is expected from an existing investor Steadview of Hong Kong., as per an Economic Times report. In the process, it is likely that the valuation of Ola will cross $5.5 billion and may even touch $6.5 billion, according to reports.
Ola has been on an aggressive expansion into new markets like Australia and Malaysia. It is also trying to give more thrust to the food delivery business Foodpanda. Some of the fresh funds being raised now will go towards this vertical, it is learnt. Like in the case of Bansal, there will be a mix of primary and secondary shares being sold to Steadview. One more block of $50 million has been raised from two Chinese entities, Sailing Capital and China Eurasian Economic Cooperation Fund. There is an indirect involvement of the ruling Chinese party in the case of Sailing Capital, according to sources.
These investments, Steadview’s $100 million and Sachin Bansal’s $100 (or $150 million) will together strengthen the hands of the founders Bhavish Agarwal and Ankit Bhati in their battle for keeping control of the company ANI Technologies, that owns Ola. The SoftBank Group having around 26% stake and the largest shareholder has been trying to influence the Board’s decision which is being opposed by the founders. However, whether these investors will get voting rights on Board resolutions has not been clarified yet.
The core business of cab-aggregation is not fully profitable yet, though it is expected to be close to that situation. There has been a drop in the business of cab-share riding and that could also be the reason the company is trying to invest more on Foodpanda to see if it can contribute to revenue and profits.