Finally, Ola sends its challenge to Uber, its chief rival in India. Today, the company announced that it raised $1.1 billion, accrediting the Chinese company Tencent.
This is the largest funding round in 6 years of Ola’s existence. It is its first major raise since November 2015 as well, when it came up with $500 million from the investors.
After 2015, Ola has been raising smaller and undisclosed amounts, which makes this round the most interesting. Furthermore, the company is looking forward to closing $1 billion more soon enough. This makes it a $2.1 billion closing, which tells us that there is more to come in this brawl.
This year so far, Ola earned its valuation of only $3.5 billion. But, as per sources related to new deals, the firm is aiming at going up to $7 billion in valuation by the year-end.
As for Tencent, it is a new backer for Ola to rectify devaluations. In fact, the Chinese giant is the leading investor presently in the transport company. Having a $300 billion valuation, Tencent looks to enhance Ola’s market competition in India. Tencent is known to back Flipkart this summer and Hike and Practo beforehand as well.
On the other hand, Ola has “secret” US-based investors, one of which might be Coatue. Coatue backed Grab and Didi before, and Didi was a previous investor in the online cab operator.
Ola’s Initiatives for the Market Brawl
Following are the initiatives that make Ola go up against the global giant Uber:
- Acceptance of cash payments right from the start.
- Ola went for on-demand deliveries but decided against the same within time.
- Standalone focus on wallet business and payments, one that the likes of Grab follow now.
- Expansion of service to more than 100 cities in the process to go beyond tier-one cities.
In order to conclude, recent investments in Ola by Tencent bring stability in the market progression of the transport firm. Now, they can really think of going up against its US counterpart, Uber.