Ola Electric Mobility (Ola Electric), the ride-hailing firm’s electric vehicle arm, has raised $250 million from Masayoshi Son’s SoftBank, according to regulatory documents. The investment has made the company a “unicorn”, or a start-up valued at more than $1 billion, according to sources.
Ola Electric issued 4,326 fully and compulsorily convertible Series-B preference shares of a face value of Rs 10 each and premium of Rs 40 lakh each to SB Topaz (Cayman), a SoftBank-led entity, according to the regulatory documents filed by the company. These were sourced by business intelligence platform Paper.vc.
The board of directors at Ola Electric passed the resolution for this capital infusion on Tuesday, following a special resolution passed by the members on June 25. The funding would help Ola compete with rival Uber, which is also backed by SoftBank.
It will also help Ola Electric in its expansion plans, as it is running pilots involving charging solutions, battery-swapping stations, and deploying vehicles across the two-, three-, and four-wheeler segments.
The financing round is timely for the firm. Last month, the government was planning to order Ola, Uber and other ride-hailing firms to convert 40 per cent of their fleet into electric by 2026.
Ankur Pahwa, partner and national leader, e-commerce and consumer internet at EY India, said to meet the ambitious plan there was a need to expand infrastructure — charging stations, battery-swapping facilities, as well as investment in e-vehicles.
“This investment adds weight to solidify the ecosystem and build the infrastructure that is needed to provide an impetus to an industry that has so far lacked funding,” said Pahwa.
Last week, Walmart-owned e-commerce firm Flipkart unveiled plans to introduce EVs for its last-mile deliveries across the country. The company aims to replace nearly 40 per cent of its existing last-mile fleet of delivery vans by March 2020.
Aryaman Tandon, director at management consulting firm Praxis Global Alliance, said EVs hold a promising opportunity in India. He said any market with a high density of population, low average road transportation speeds, and availability of affordable electricity, represents a fundamentally attractive market for EVs.
“India, as a market, is characteristic of all these underlying macro drivers and has also rapidly improved the electricity supply infrastructure in the last decade,” said Tandon. In May, Ratan Tata, chairman emeritus of Tata Sons, invested an undisclosed sum in Ola Electric. The firm had also raised a sum of Rs 400 crore in March, led by several of Ola’s early investors, Tiger Global, Matrix India and others, as part of its first round of investment.
Experts said the new funding round has also suppressed speculations that Bhavish Aggarwal-led Ola and Ola Electric were trying to avoid additional investments from SoftBank.
Masayoshi Son-led SoftBank’s Vision Fund has over $100 billion in committed capital for tech investments. Last month, at a general shareholders’ meeting in Tokyo, Son had said SoftBank Vision Fund aims to accelerate the “information revolution” by continuously making large-scale and long-terms investments in companies aiming to realise next-gen innovations and platform business.
“Artificial intelligence, I think is the biggest revolution in human history,” said Son. He had, however, also said SoftBank’s role is not to develop AI technologies such as autonomous driving but he wants his portfolio companies such as Uber, DiDi, Grab and Ola to develop them.