Ola's electric mobility unit gets Tiger, Matrix financial backing

Subsidiary Ola Electric Mobility raises Rs 292 cr from these early backers; firm likely to raise Rs 400 cr in total in this round

After testing the waters for the past two years, Ola Electric Mobility, a subsidiary of ANI Technologies that owns the home-grown cab-hailing firm Ola, is now preparing to move on to the next phase with the backing of marquee global investors.

The Bengaluru-headquartered firm has raised close to Rs 292 crore from global investment firms Tiger Global Management, Matrix Partners, and Sarin Family India LLC (family office of ex-Vodafone chief executive officer Arun Sarin), according to regulatory filing by the company sourced through the data and business intelligence platform Paper.vc.

The document said that the board of director of Ola Electric Mobility has issued and allotted “1993 Series A compulsory convertible preference shares of face value of Rs 10 each of the company, at an issue price of Rs 14,61,523,” to the above investors.  

This is for the first time that Ola Electric Mobility has tapped external funding on its own as an independent unit within Ola.

Interestingly, Tiger Global, Matrix, and Sarin are already investors in Ola, the parent company. Tiger Global invested in Ola early on when it raised the Series A round, followed by Matrix Partners.

An Ola spokesperson declined to comment on the matter. However, sources in the know said the company will raise a total of Rs 400 crore in this round, which will be led by the same set of investors.

Ola Electric Mobility was incorporated in February 2017, with the aim of providing services across electric vehicles (EVs) value chain, including building infrastructure for facilitating the EV ecosystem. Ola, which by far is said to be the dominant player in the cab-hailing space in India, has expressed its interest in the EV space.

The Bhavish Aggarwal-led company last year had announced its commitment to bring 1 million EVs on Indian roads by 2021. According to its Mission:Electric plan unveiled last year, the company had announced plan to place 10,000 e-rickshaws and e-autorickshaws in its service within a year’s time.

Ola’s EV strategy is currently headed by Anand Shah, a former top executive at Albright Stonebridge Group, a Washington DC-based lobby firm headed by former US secretary of state Madeline Albright, who joined the company in March last year. Shah, who is currently a senior vice-president (V-P) at Ola, was also associated with large automotive companies such as BMW and Audi in his earlier stints. Shah will be assisted by Ankit Jain, a former McKinsey executive who is currently V-P and head of Ola Play at Ola, according to his LinkedIn profile.

Experts also believe the funding in the electric mobility unit could be related to the fast changing dynamics of the ride-hailing market. "If Ola wants to continue to grow and expand, in a post-Uber-IPO market, it needs to find ways to do so by getting into businesses that are less discount-driven,” said Vivek Durai, founder of Paper.vc. “One of the ways it can do so is to ally itself with policy-makers, investors and companies (bike rental companies, electric bike manufacturers, component manufacturers) that have an interest in the expansion of the two-wheeler electric market." 
 

According to sources in the know, the pilot programme launched by the company in Nagpur to introduce multi-modal EVs, as part of its fleet, has given Ola a head start and it is now looking at taking this to the next phase. “Over the next few months, the firm will focus on building the infrastructure required for EVs, including deployment of battery charging and swapping stations by partnering original equipment makers,” sources said.

Both Tiger Global and Matrix Partners are very active in the start-up investment space in India. While Tiger has invested in Flipkart, Delhivery, Quickr, and ShopClues, to name a few, Matrix has names like Razorpay, Practo, Vogo, and Myra as part of its India portfolio.