India's Ola receives $500m pre-IPO round
Temasek Holdings and Warburg Pincus have joined a $500 million in Indian ride-hailing platform Ola ahead of an IPO.
Warburg Pincus led the round, contributing $280-300 million at a 35-50% discount to Ola’s 2019 valuation of $5.5-6 billion, according to The Economic Times. Early investors Tiger Global Management and Matrix Partners India are said to have sold down shares as part of the round.
Ola’s co-founder, chairman, and CEO Bhavish Aggarwal also participated in the investment. The company has not specified details regarding its IPO plans.
It comes amid a mixed pandemic story for ride-hailing, which is often seen as a safer option for commuters. Industry researcher RedSeer estimates that the sector recovered 63% compared to pre-COVID-19 levels with 71 million rides in January 2021. However, India’s struggles with a second wave of infections since this period have trimmed recovery projections to 30-40% for the near term.
“Over the last 12 months we’ve made our ride-hailing business more robust, resilient and efficient,” Aggarwal said in a statement. “With strong recovery post lockdown and a shift in consumer preference away from public transportation, we are well-positioned to capitalize on the various urban mobility needs of our customers.”
Ola is India’s largest mobility platform and one of the world’s largest ride-hailing companies. The company claims to have served more than one billion people since its inception in 2010 across 250 cities in India, Australia, New Zealand, and the UK. Additional business lines include electric vehicle (EV) manufacturing, with Ola’s Futurefactory said to be the largest two-wheeler producer globally.
Ola Electric, an EV unit with interests in charging stations and battery swapping systems that launched in 2017, was spun out as an independent entity in 2019. The idea is to bring one million EVs to Indian roads by 2022. This would be in line with India’s push to move toward a totally electric transportation system; the government aims to have only EVs sold in the country by 2030.
SoftBank invested $250 million in Ola Electric at a valuation of $1 billion shortly after its spinout, becoming the largest shareholder with 22%. Ola Electric is also backed by Tiger and Matrix India.
Some of the more recent investors in Ola include US-based Deshe Holdings and Sweden’s DIG Investment, which provided $11 million as part of a Series J round in 2019. This followed closely on a $300 million commitment from Hyundai Motor and Kia Motors.
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