Steadview, Sequoia lead $41m round for India’s Olacabs

Existing investors Matrix Partners India and Tiger Global Management also participated.

Ola will use the new capital to expand its operations into new markets, although INR1 billion has been earmarked for a "micro-entrepreneurship" initiative whereby the company helps its network of independent drivers and operators buy their own cars. It gets vehicles at discount prices through partnerships with manufacturers and then works with financial institutions on repayment schemes.

Founded in January 2011, by two alumni from the Indian Institute of Technology in Mumbai - Bhavish Aggarwal and Ankit Bhati - Ola runs a platform through which customers can hire from a network of 11,000 cabs, either independently owned or part of small rental outfits, across nine cities. The company wants to expand to 20 cities by the end of the year.

Bookings are handled by a call center but half of Ola's business is now transacted via a mobile app that allows real-time tracking by customers. Drivers carry a GPS-enabled Android device that also helps with navigation and billing.

"Ola is solving a real problem by providing Indian consumers a safe, comfortable, standardized service offering at transparent and competitive prices. At the same time, it is serving cab drivers and operators helping them buy their own cars and improving business for them, thereby nurturing micro-entrepreneurship," said Avnish Bajaj, co-founder and managing director of Matrix India, in a statement.

Ola received $5 million in Series A funding from Tiger Global in 2012. Last year, Matrix led a Series B round - with participation from Tiger Global - said to be worth around $20 million.

A number of players compete in India's online tax-booking space, notably global operator Uber Technologies, which launched in the country last year and provides services in Bangalore, Mumbai, New Delhi, Hyderabad, Chennai and Pune. Much like Meru, a taxi service set up by India Value Fund Advisors, Uber runs its own car fleets.

Ola and other industry participants prefer the asset-light approach of aggregating independent taxi operators. Several have VC funding, including Taxiforsure.com, which has received funding from Accel Partners, Helion Venture Partners and Blume Ventures, and Inventus Capital Partners-backed Savaari Car Rental.

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• Topics
• Venture
• Technology
• Consumer
• South Asia
• Early-stage
• Venture
• Transportation
• TMT
• Consumer
• India
• Matrix Partners
• Sequoia Capital