Ola confirms Tencent investment, targets $2b round
China's Tencent Holdings has led a $1.1 billion investment in Indian ride-hailing app developer Ola. The company is in talks with other investors to raise a further $1 billion as an extension of this funding round.
Existing investor SoftBank also participated, according to a release, along with several unnamed new investors based in the US. Ola did not disclose the size of each investor’s commitment, though filings with the Registrar of Companies previously cited by Indian media indicate that Tencent bought 1.94 million shares for INR13,521 apiece, giving it a 9.75% stake. It implies a valuation for Ola of approximately $4.1 billion.
In May, similar filings indicated that the company had raised INR6.7 billion ($104 million) from Falcon Edge Capital and RNT Capital Advisors, a VC fund backed by Ratan Tata, chairman emeritus of the company that controls Tata Group. They paid the same price per share as Tencent.
Ola is seeking new capital to build its artificial intelligence and machine learning capabilities in order to improve efficiency and customer experience. It hopes to leverage Tencent’s technology expertise to help with these improvements.
Ola was founded in 2010 and claims to be India’s most popular mobile app for personal transportation. Its platform offers taxis, luxury vehicles, auto-rickshaws and shuttle buses, and claims to have more than 800,000 vehicles available across 110 cities. Alongside Didi Chuxing, Lyft and Grab – counterparts from China, the US and Southeast Asia, respectively – it is part of a strategic global partnership allowing the four companies to leverage each other’s technology, local market knowledge and business resources.
“We are thrilled to have Tencent Holdings join us as new partners in our mission to build mobility for a billion Indians,” said Bhavish Aggarwal, co-founder and CEO of Ola. “Our new partners share our passion for building the future of transportation in India together and we look forward to learn and benefit from their global perspectives and ecosystems.”
SoftBank has been a major supporter of Ola, participating in several funding rounds. Its most recent commitment came last November when the firm invested INR16.75 billion ($259 million). The funding round valued Ola at about $3 billion, down from $5 billion as of the previous round in 2015, and came after SoftBank marked down the part of its portfolio including holdings in Ola and Indian e-commerce platform Snapdeal.
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