Ride-hailing app Ola today said it has raised USD 1.1 billion in a new round of funding from China's Tencent Holdings Ltd and SoftBank Group, bolstering its war chest to compete against US-based rival Uber.
While the funding round is not finished yet, with talks going on to raise another USD 1 billion from a group of investors, the funds will help Ola build its supply of vehicles and drivers as well as technology to fight Uber.
The two are locked in an intense battle for leadership in the Indian market and have pumped in millions of dollars in driver incentives and discounted rides for customers.
Bengaluru-based Ola said in a statement that it is in "advanced talks" to close an additional USD 1 billion to conclude a total mop-up of over USD 2 billion.
The company, however, did not disclose the valuations at which funds were raised. It also did not disclose the time period when the funding was raised or the timeline for the closure of the total USD 2 billion round.
While Tencent Holdings led the round, existing investor SoftBank also participated in the latest round of funding in addition to other new US-based financial investors, Ola said.
According to industry sources, who did not wish to be named as the discussions are private, the USD 1.1 billion came in over the last 4-6 months in tranches.
The additional USD 1 billion funding is also likely to be closed in the next few weeks, they added.
One of the sources said SoftBank, which is the largest shareholder in Ola, has pumped in about USD 300 million in this round.
Over the last few years, the explosion of smartphones in India -- one of the world's largest telecom markets -- has made it more convenient for consumers to book a cab on the go through apps and secure payment options.
Uber, which is touted as the world's most valuable start-up, has increased its focus on India -- a market where it claims to have seen over 100 per cent growth. Uber has a presence in about 30 cities in India.
Talking about the partnership, Ola said: "Tencent Holdings Limited, a leading Internet company in China, will bring significant expertise to Ola as it furthers its leadership position across the mobility market in India."
Ola will make strategic investments in supply, technology and innovations "to build for the country's unique transportation needs". It has operations across 110 Indian cities.
The cab aggregator also plans to make significant technology investments into artificial intelligence and machine learning capabilities.
ANI Technologies, which operates Ola, counts among its investors names like SoftBank Group, Tiger Global, Sequoia India and Accel Partners US.
While ANI Technologies is not a publicly-traded company, according to regulatory documents, its revenues registered a stellar growth at Rs 758.23 crore during 2015-16 compared to Rs 103.77 crore in the previous fiscal.
However, Ola suffered a consolidated loss of over Rs 2,311 crore -- about Rs 6 crore a day -- during that fiscal on account of heavy advertising, promotional expenses and other costs.
"The transportation and mobility industries are seeing huge changes globally. Our ambition is to build a globally competitive and futuristic transportation system in India that will support and accelerate a nation on the move," Ola Co- Founder and CEO Bhavish Aggarwal said in the statement.
Ola looks forward to learn and benefit from Tencent's global perspectives and ecosystems, he added.
Martin Lau, President of Tencent Holdings, said the strategic partnership with Ola "makes it possible for Tencent to be part of the fast-growing ride-hailing space in the country".
Tencent is also aggressively investing in the country to cash in on the burgeoning Indian internet market.
Earlier this year, Tencent was part of Flipkart's USD 1.4 billion fund raising that also saw participation from Microsoft and eBay.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)