Bengaluru-based Taxi app company Ola has recently raised a funding of $400 million (apprx.Rs 2,500 crore,) from a number of investors. With this, the 15,600 crore startup has become India’s third-most valuable venture-backed company after Flipkart and Snapdeal. The Taxi app company will invest the newly raised money into expanding into new locations and diversifying into new business areas. Ola through this move is looking into strengthening its lead in the cab-aggregation market which it had acquired after buying its rival company TaxiForSure in March. The merger now has almost 80 percent share in the cab market.
The company is currently competing with Uber in India. Although Uber doesn’t have a significant share in the Indian market yet, but being the second most valuable startup in the world valued at $41 billion, it has huge plans for India.
The latest round of funding was joined by New-York based hedge fund Falcon Edge Capital, Singapore’s state investment arm GIC and DST Global along with the company’s existing investors Accel Partners US, Tiger Global, SoftBank group and Steadview Capital. The company last raised $210 million in October 2014.
“Our growth has been strong and we have a very strong market leadership position, which are key reasons for our investors being so supportive,” said Bhavish Aggarwal, founder, Ola in a statement to the Economic Times. Aggarwal has started the firm back in 2011 along with his IIT-Bombay collegemate Ankit Bhati.
According to investor documents accessed by the Economic Times, Aggarwal owned 12 percent in ANI Technologies, the parent company of Ola, and Bhati 5 percent by the end of March.
For Taxi apps in India, the biggest problem is not the market. With the recent Uber rape case in Delhi, Uber and Ola have both been banned in the city and the government hasn’t yet come out with any rules or regulations to govern their services.
According to a statement released by the company on 16th March, the company will use the raised money to expand its cab aggregation services in about two hundred smaller towns and cities. The company has already expanded to 100 cities in the current year.