Deal focus: Tata Capital bets on Uber in India

"Usually we're supporting Indian companies as they expand overseas. This is the first global company we're actually helping expand in India," says Bobby Pauly, a partner at TOF. "This is a partnership with a global company where we're leveraging the networks and relationships that Tata Group has in the country. It is something we are going to do more going forward."

Pauly adds that although Uber is a late comer to India, it has demonstrated strong growth. With a base of more than 150,000 drivers and business expanding 40% month-on-month, Uber has gained a market share in India of over 35%. The company now operates in more than 330 cities across 60 countries, of which India is largest individual market outside of the US with services available in 18 cities.

Prior to TOF's investment, Uber announced plans to invest $1 billion in India by early next year. It is taking the fight to local rivals like Ola, a taxi-booking service that recently raised $315 million and claims to operate in over 100 cities with a network of 200,000 drivers. Interestingly, both Uber and Ola have received individual investments from Ratan Tata, chairman emeritus of Tata Group holding company Tata Sons.

While industry consolidation has already taken place in countries like China, Pauly says India has enough rooms for multiple players to grow, particularly as mobile internet penetration remains below 20%.

"India is a huge market where there are 45-50 cities with populations of more than one million people," he says. "I think it's useful to have multiple players in the market - especially a combination of global and local players - because it will create fair competition."

Despite Uber's global ambitions in private car services, it has run into regulatory obstacles in a number of jurisdictions. In India, several state governments - first Dehli National Capital Territory and then Maharashtra, Uttar Pradesh, Karnataka, Chandigarh and Telangana - banned Uber's services after one of the company's drivers, who operate as independent contractors, was accused of raping a passenger. The ban was lifted last month.

"We feel comfortable that Uber provides safe, convenient and cost-effective services to drivers and passengers. Current regulation has yet to catch up with the pace of technology and new applications, and this creates problems," Pauly says. "Uber has experience operating in 330 cities, working with regulators and confronting issues. We are confident that they have the capability as well as the willingness to work with regulators and deliver real solutions."

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• Topics
• Expansion
• South Asia
• Technology
• Tata Capital
• India
• Transportation
• Technology
• TMT
• Growth capital