Ola cuts down losses on way to profitability, revenue up 61% at Rs 2,223 cr

Home-grown riding-hailing firm Ola has widened its revenues while cutting down on losses in FY18. According to a filing by ANI Technologies, the firm that owns the brand, Ola saw a 61 per cent rise in its revenues in FY18 at Rs 2,223 crore, backed by strong growth in bookings as well as its leasing business. The data was sourced from business intelligence platform Paper.vc. Unlike the previous year, revenues surged by burning lesser cash. Losses during the period came down to Rs 2,844 crore, a 42 per cent decline over the previous year. 

In a disclosure with the RoC in November 2017, a third-party valuation report on Ola had projected it to be profitable in FY19, with a net operating profit of Rs 1,170.49 crore. In July last year, Ola's Co-founder and Chief Executive Bhavish Aggarwal had confirmed the firm was making profit on every ride and would soon become cash-flow positive.

Revenues from leasing business stood at Rs 367 crore, a growth of 272 per cent over the previous fiscal. Revenues from its wallet business jumped more than two times at Rs 56.71 crore in FY18, though losses rose 62 per cent to Rs 40.62 during this period. The food business, the newest vertical built with acquisition of Foodpanda, reported revenues of Rs 14.88 crore, though losses from the segment were more than two times at Rs 30.43 crore.  

As it heads towards profitability, this is also expected to aid Ola to reduce its reliance on external funding. One of the heavily invested company in the domestic ecommerce space, Ola has so far raised around $3.4 billion through investors starting from Tiger Global, Tencent and SoftBank among others, in multiple rounds, according to Crunchbase. 

Starting August, Ola has forayed into global markets including the UK, Australia and New Zealand which may have added some pressure on its balance sheet. However, the healthy rise in bookings logged by the company in FY18 and the strong growth of its leasing business, is expected to give it a boost to generate cash, reducing some of these pressures.