This is the first major acquisition in the taxi-aggregator space in India.
Ola, already a leader in the personal transportation market with a valuation exceeding $1 billion (Rs 6,000 crore) and over 100,000 vehicles on its platform, will become a stronger entity through TaxiForSure’s operator-led model. The latter operates in 47 cities, with at least 15,000 vehicles on its platform.
Larger rivals Meru Cabs and Uber are on a discounting spree to corner as much market share as possible. Meru has a fleet size of 15,000 and Uber is present in 11 cities, the second biggest geographical presence for the American giant outside the US.
Last week, Uber cut fares by about 30 per cent. Meru has been giving out discounts at a cautious pace. The belief among experts in the sector is that only two or three major entities would survive. Meru is already in talks with regional brands to expand its presence in smaller cities. It is aiming to raise $100-150 million from existing and new investors.
After the merger, Ola and TaxiForSure will continue to operate as separate entities. TaxiForSure’s leadership and 1,700 employees will continue to work with it, under Arvind Singhal (earlier the chief operating officer) as chief executive officer. Aprameya Radhakrishna and Raghunandan G, its founders, will contribute in advisory roles for a certain period.
“There is significant complementary value that this acquisition adds both on the supply and demand sides for Ola and TaxiForSure,” Ola said.
It added, “The latter follows a different model of supply and distribution by working with cab operators, while Ola works with driver-entrepreneurs.
TaxiForSure has in the past also focused heavily on the economy segment of cab consumer, with innovative offerings like Tata Nanos as part of their fleet and Rs 49 as base fares.
For customers, drivers and operators on the TaxiForSure platform, there will be little change. Customers can continue to book a cab through the app, and the call centre and drivers will continue to get access to customers on TaxiForSure’s technology platform.”
Ola, founded in 2011, is one of the most vibrant start-ups from India. In four rounds of fundraising, it has been financed by Tiger Global, Matrix Partners, Sequoia Capital, Steadview Capital and, more recently, SoftBank.
Investors in TaxiForSure are Accel Partners, Bessemer Venture Partners and Helion Venture Partners.
Announcing the merger, Ola's co-founder & chief executive, Bhavish Aggarwal, said:
“Ola and TaxiForSure share the same vision of revolutionising urban mobility. TaxiForSure has a great team and they have built a very exciting business in a short time. There’s a lot of complementary value in the strategy it follows.”
TaxiForSure’s Raghunandan G said: “Coming together with Ola will provide us with more opportunity to do what we do best.”
The deal will strengthen Ola’s presence and turn up the heat on Meru Cabs and Uber
After the deal, Ola and TaxiForSure will continue to operate as separate entities
TaxiForSure will add capacity of 15,000 vehicles to Ola’s platform of 100,000 vehicles
With this acquisition, investors in TaxiForSure will roll over their stock in Ola
Softbank, Tiger Global, Matrix Partners, Sequoia Capital, Steadview Capital have invested in Ola
- TaxiForSure investors include Accel Partners, Bessemer Venture Partners and Helion Venture Partners