Bangalore-headquartered ANI Technologies Pvt. Ltd., which owns and operates Ola cab aggregation service, has raised $50 million in funding from two new investors – Hong Kong-based Sailing Capital and the China-Eurasian Economic Cooperation Fund (CEECF).
CEECF is a Chinese state-backed fund that was set up with a mission for deepening economic cooperation between China and the Shanghai Cooperation Organisation region. The fund was announced by Chinese President Xi Jinping in 2014, with an initial size of $1 billion, as an investment vehicle for further realising the country’s Belt and Road Initiative.
Ola issued 250,000 preference shares divided equally between Hong Kong-based private equity fund Sailing Capital and the China-Eurasian Economic Cooperation Fund (CEF), documents filed with the Registrar of Companies, which were sourced from Paper.vc, showed.
The funding came at a time when Ola is aggressively expanding outside and within India. Last month, Ola obtained licences to operate in South Wales and Greater Manchester of United Kingdom (UK). Prior to this the company had launched its services in Australia.
The fresh investment was part of Series-I 2 round in which the company raised $50 million from the two investors at a valuation between $3.7 billion and $4.2 billion. Ola had closed its Series-I 1 round in September 2017 and Series-I 3 round in December of the same year.
With this funding, CEECF along with Sailing Capital will own close to 1.2% combined stake in the Indian ride-hailing firm. The formalizing of the investment comes at a time when Ola is in talks with multiple investors to raise as much as $1 billion to take on rival Uber, not just in India but also overseas markets such as Australia and the UK.
In a report published last month, Singapore’s sovereign wealth fund Temasek had reportedly invested as much as $225 million in Ola to pick up a high single digit stake in the company. The deal was said to have given exits to several early investors in Ola, including the buyback of employee stock ownership plan from some employees.
According to media outlets, Ola is looking for raise fresh capital from new investors to reduce the power of its largest investor SoftBank, which now owns a little over 25 per cent stake in the company. Last year, Ola founders Bhavish Aggarwal and Ankit Bhati had blocked a move by SoftBank Chairman Masayoshi Son to purchase shares from the company’s second largest investor Tiger Global.
While the company requires capital to expand its business, especially since it is rapidly entering new geographies, Ola wants to keep SoftBank from exerting too much pressure on its board. SoftBank has invested close to $8 billion to pick up 15 per cent stake in Ola’s biggest rival Uber, making it the largest investor in both the ride-hailing firms.
To recall, Indonesian unicorn startup Go-Jek, which offers hyperlocal transport, logistics and payment services, is also planning to launch its bike-taxi service in India in the second half of 2018, and this will be an another unicorn tagged competitor for Ola as the later is also into bike-taxi service called as ‘Ola Bike’.
In May this year, it was also reported that Ola (ANI Technologies Pvt. Ltd) is planning to set up a holding company that will own different business units, including its core cab business, food delivery app Foodpanda and the nascent businesses of electric vehicles (EV) and the international unit.
[Top Image – DriveSpark.com]