Ola, the largest cab aggregator in India, is looking to allocate a significant chunk of the fresh funds it raised recently — $400 million — towards technology as it believes ‘mobility first’ is the road that would help it achieve exponential growth.
Speaking at the India Internet Day event on Friday, Bhavish Aggarwal, co-founder and CEO of Ola, said the company was planning to focus on the ‘mobility first’ strategy. The firm is planning to scale up rapidly and double its products and engineering team to about 1,000 in the next quarter.
“We have to think mobility first as that is changing everything around us. The first step in that direction would be investing more in technology. That is one area we are stronger today than a year back, but a lot more is being done at that core,” said Aggarwal.
Ola is now valued at $2.5 billion after it closed its E-series funding of $400 million from DST Global, GIC and others. Apart from cabs, Ola is into autorickshaw app aggregation and recently forayed into food delivery with Ola Café, currently being run as a pilot in four Indian cities.
“We are not just a cab aggregation company, but a technology company and we are looking at building a whole ecosystem for that,” he added.
With the new cash in hand, Ola would look to further cement its leadership position in the cab aggregation market, turning the heat on American rival Uber and Mumbai- based Meru Cabs. Ola’s recent acquisition of TaxiForSure has already put the company ahead of its rivals.
Ola’s ‘mobility first’ strategy is not surprising as major e-commerce/new-age companies are reporting the largest part of revenues coming from mobile devices. In fact, Myntra, the leading e-tailer acquired by Flipkart, plans to become an app-only platform soon, according to reports.
“We have been growing at 30-40 per cent over the past few months and are looking to excel that,” added Aggarwal.
Cab services is a hyper local model where building the supply chain takes a lot of time and investment. Hence, investors with very deep pockets and long-term horizon will be able to sustain and see through the cash burn and create a profitable business, say experts.
On Thursday, Ola had said it had earmarked $100 million from this round of funding for expansion and growth of TaxiForSure. The funds will also be used to expand Ola’s footprint from 100 to 200 cities by December this year.
The additional investment is expected to allow Ola to go deeper into smaller cities and build personal transportation ground-up.