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India’s homegrown ride-hailing giant Ola today officially confirmed that it has raised a whopping $1.1 billion funding in a round led by Chinese internet conglomerate Tencent. Reportedly, the talks for the same have been in the works for over a year now.

According to media reports, the Bengaluru-based startup is also in “advanced talks with other investors to close an additional $1 billion as part of the current financing round.” This will take the the total amount raised by the cab-hailing company to over $2 billion.

In a statement announcing the funding, the company also revealed that its existing investor SoftBank besides “other new US-based financial investors” also participated in this round.

“We are thrilled to have Tencent Holdings join us as new partners in our mission to build mobility for a billion Indians. The transportation and mobility industries are seeing huge changes globally. Our ambition is to build a globally competitive and futuristic transportation system in India that will support and accelerate a nation on the move!,” said Ola’s Co-Founder and CEO Bhavish Aggarwal.

Ola plans on using the capital raised to improve the supply of drivers and do deeper investments in technology, primarily in data sciences and electric vehicle infrastructure.

The first commitments for the current funding round came in November 2016, when Ola raised $250 million raise from SoftBank. After this, Ola decided to keep the round open and raised about $150 million in funding this year, from funds like New York-based hedge fund Tekne Capital Management, US hedge fund Falcon Edge, and Ratan Tata’s venture fund RNT Capital Advisors.

In July this year, it was revealed global taxi-hailing giant Uber has managed to beat out its Indian competitor Ola in its own home country. According to data from a research by KalaGato Pte show, US-based Uber has been able to grow its market share in the six months to June at 50 per cent as its rival Ola Cabs has a share of 44.2 per cent.

The data was based on app downloads registered the period in 60 Indian cities, including the top 10 metros in the country besides Tier 1 and 2 cities. Other than Uber and Ola, the research data revealed that Ixigo Cabs has a 4.5 per cent share of the car-hailing market, followed by Meru Cabs at just 1.3 per cent.

The data also highlighted that the race was a close one. According to it, Ola was ahead of Uber in January and February at 51.8% and 48.1% market share, respectively. However, the picture changed in March when its US-based rival raced ahead at 48.9 per cent share, while Ola was left holding just 45.2 per cent in March.

Reportedly, Softbank, which still remains the largest shareholder in Ola owning over a third of the firm, is also contemplating investing in its global rival Uber. Tencent’s entry into the investor group is most likely to counter the influence of Softbank in the homegrown ride-hailing firm.

“Ola’s unique local offerings are tailored to India’s burgeoning transportation needs. The strategic partnership with Ola makes it possible for Tencent to be part of the fast-growing ride-hailing space in the country,” said Martin Lau, President of Tencent Holdings.

Recent times have seen Tencent increasing its investment activity in the market and emerging as one of the most closely watched investors in Indian internet startups.

Tencent made its investor entry into the Indian startup industry two years ago in 2015 by leading a $90 million round in Practo Technologies, a digital health platform. Other than Flipkart and Practo, the Chinese company has also invested in India’s homegrown WhatsApp rival messaging app Hike.

This development was first reported in ETtech.

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