Ola to raise $500 mn for global expansion
Sources said SoftBank, the largest investor in the Bengaluru-based company, has shown an interest to lead the round
Bengaluru, 5 December
Homegrown cab-hailing major Ola is in talks with some of its existing as well as new investors to raise up to $500 million to help fund its ongoing global expansion, according to senior industry sources privy to this development.
Sources said SoftBank, the largest investor in the Bengaluru-based company, has shown an interest to lead the round, but the cab aggregator is not keen to pursue it. Instead, it plans to raise a fresh round from Chinese investment firm Tencent or even DST Global, one of the persons cited above said.
“Even there is a high chance of Sachin Bansal (Flipkart co-founder and former chairman) participating in this round,” the person said. SoftBank owns around 26 per cent stake in Ola. Any future investment will take the Japanese conglomerate’s stake to a level that will be enough for the investment firm to influence special resolutions, including mergers and acquisitions. Among the other key shareholders, Tiger Global and Tencent have close to 16 per cent and 10.5 per cent in Ola, respectively.
In May 2017, just before the $1.1-billion fundraise, Ola gave its founder Bhavish Aggarwal and Ankit Bhati more voting right through a special resolution. This means, under any circumstance, the shareholding of founders will not drop below 10 per cent (from the current 12.3 per cent), and that any investor buying more than 10 per cent share in the capital in the firm needs an explicit approval from the founders. Ola’s spokesperson could not be reached for a comment on this development.
One of the reasons why Ola is in need of going for fresh funding round is its aggressive expansion into global market. The company, which fights fiercely with rival Uber in Indian market, has already forayed into few cities in the UK, followed by its launch in Australia. Last September, it entered New Zealand with operations in three cities — Auckland, Christchurch, and Wellington.