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India’s homegrown ride-hailing giant Ola yesterday confirmed that it has raised a whopping $1.1 billion funding in a round led by Chinese internet conglomerate Tencent. The company also revealed that its existing investor SoftBank besides “other new US-based financial investors” also participated in this round.

In addition to confirming the Tencent funding, the Bengaluru-based startup also said that it is 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 Ola in the round to over $2 billion.

According to media reports, this fresh round of funding will end up valuing Ola at almost $7 billion and help the firm in solidifying its efforts on remaining ahead of its market rival Uber.

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.

Ola has plans of using the capital raised for making significant technology investment into improving supply of drivers and artificial intelligence and machine learning capabilities that will someday be capable of solving the country’s unique mobility problems. It wants to focus its attention in data sciences, electric vehicle infrastructure.

Ola’s latest investment comes at a time when the cab-hailing industry is witnessing a fall in the number of drivers registered on the platforms and a decrease in driver incentives. Ola, which saw a sevenfold increase in its revenue to Rs 758 crore in FY16, recorded a loss of Rs 1,760 crore for the same year because heavy discounts offered to passengers and incentives to driver partners worn down the company heavily.

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