Ola raises $210 mn in Series D funding led by SoftBank

Taxi aggregator gets $210 million from SoftBank, others

Online taxi aggregator Ola (formerly Olacabs), which on Tuesday said it had raised $210 million (around Rs 1,260 crore) from a group of investors led by Japanese telecom and media group SoftBank Corp, has an ambitious plan to be present in 100 cities across India by the end of 2015 as against 19 cities now. The company intends to use most of its latest funding to meet this target.

The Bangalore-based company has accelerated expansion over recent days as it forayed into nine cities in the last two months. The company now has around 33,000 cabs available on its applications to book from.

This Series-D funding is the largest single round of fundraising by the company so far. Apart from SoftBank Corp, the latest round also saw participation from Ola’s existing investors, Tiger Global, Matrix Partners India and Steadview Capital.

"Since SoftBank's foundation, our mission has been to contribute to people's lives through the information revolution. We believe India is at a turning point in its development and have confidence that India will grow strongly over the next decade," Masayoshi Son, chairman and chief executive officer of SoftBank, said. "As part of this belief, we intend to deploy significant capital in India over the next few years to support development of the market," he added.

According to sectoral sources, this round of funding pegs Ola's valuation at over $1 billion. The total funding in Ola now stands at $276.8 million, according to CrunchBase, a database of startups.  The company also said it would invest a part of the recent funding in “innovative categories” relating to commuting and travel.

“We recently launched the Kaali-Peeli taxis on our app in Mumbai, and also added the ‘Prime’ category to our app across several cities. On similar lines, we will continue to introduce new solutions for our consumers,” said Bhavish Aggarwal, co-founder and chief executive officer of Ola.

Even as some industry sources say that Ola may look at expanding into the self-driven car rental segment, Aggarwal said this was not on the company’s radar any time in the near future.

“We want to be a complete car-travel solutions provider, and we may introduce new and innovative initiatives in the future, but self-driven cars is not a part of our plans any time soon,” he said. “We don’t think there is a significant market in this space right now.”

The Indian online taxi aggregation business has become highly competitive over the last few years, with players such as Ola, TaxiForSure, and Meru. Business in this segment is being backed by strong venture capital investors. However, the self-driven car rental space, which is a common service in western countries, is still not developed in India and remains far less crowded.