Ola, India’s largest cab-hailing service, is getting into the financial services space by tapping its million-strong driver network as a captive customer base to begin with. It has roped in PayU India co-founder Nitin Gupta to head the business. Gupta will lead Ola Money, the Bengaluru-based firm’s e-wallet, which would morph into a financial services business, a company spokesperson confirmed. So far, the platform has been offered as a wallet for users who can pay for their cab rides, besides buying goods and services from its partners. It had also signed up around 20 partners, including Domino's, Pizza Hut, Cafe Coffee Day and BookMyShow, whose offerings could be bought using the wallet. But, this has limitations. Increased compliance costs and competition in the wallet business meant Ola either had to make its platform open or diversify into newer areas. Choosing the second option, it is looking to harvest the financial transaction data of its drivers on the platform to offer a range of financial services such as personal and vehicle loans and insurance to them.
It is also looking to expand this to its nearly 100-million users across the country. Ola operates in more than 110 towns and cities, which will allow it to enter smaller towns, where it is difficult to access such services. For this, it would use part of the $1.1-billion cash kitty it has after the round of funding in October, led by Chinese internet giant Tencent, even as it battles global rival Uber to retain dominance in the cab-hailing space. Ola’s diversification into financial services is also an attempt to engage with its core user base and drivers, even as larger investor SoftBank looks to increase stake in the company. The Japanese internet firm is in the final stages to pick up a stake in Uber by buying out some shares of existing investors in the US firm at a discount. This could have an impact in India with SoftBank potentially dictating terms of operations for both firms in the country. At the same time, the founders of Ola are fighting back to retain control. Ola has amended its articles of association to disallow investors to sell their stake in the company to each other without the prior approval of the founders. In a November regulatory filing, Ola had projected to turn profitable by fiscal year 2019 and rake in profits of $1 billion by 2021.