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Despite hefty losses, SoftBank still backs Ola

Ola has already begun to position itself from fast-paced growth to growth with profits in its sight

Alnoor Peermohamed  |  Bengaluru 

An employee speaks over his phone as he sits at the front desk inside the office of Ola cab service in Gurugram (Photo: Reuters)
An employee speaks over his phone as he sits at the front desk inside the office of Ola cab service in Gurugram (Photo: Reuters)

India’s largest taxi service aggregator, Ola, reported a threefold increase in losses to Rs 2,313.6 crore for the year ended March 31, 2017, but its largest investor, SoftBank, continued to retain confidence with the company.
 
Unlike with Snapdeal, the Japanese investment firm’s biggest bet in India that it is desperately trying to sell, SoftBank’s demands from are more on the lines of pulling up its socks, sources said.

 
penalised in its latest round where it invested $250 million at a $3.5-billion valuation, down from $5 billion at which the company had raised its last round. Moreover, has already begun to position itself from fast-paced growth to growth with profits in its sight.
 
“We have significantly improved our bottom line over the past year or so, and we have a very clear path to profitability. Within the next two years, we will be profitable,” said Bhavish Aggarwal, co-founder and chief executive, at a TiE event in Delhi last month.
 
has drastically scaled back incentives it had paid to drivers to keep them from being poached by rival Uber, which has done the same. Issues of fares, too, have crept up on both platforms in the past six to eight months.
 
While burned money to fend off an attack from Uber, the US ride-hailing giant felt the pinch, too. Estimates suggested spent between $600 and $800 million in 2016, which helped it get to 45-per cent market share in the Indian taxi aggregator market, with still maintaining the lead.
 
Industry watchers say while it’s completely possible for a firm like to step in and take control of Ola, it’s usually one of the least favoured options.

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