Ola plans to raise $250 million soon

Indian online transportation network company Ola is going ahead with its plan to raise $250 million from existing shareholders as a part of its initiative to take on the competition from US-headquartered rival Uber.

According to the documents filed with the Registrar of Companies (RoC), Ola plans to sell about 1.3 million preferential shares at Rs 12,905 each in a rights issue to shareholders.

When DH reached out to Ola officials on the matter, the company official didn’t comment. Bengaluru-based ANI Technologies, which owns Ola, in its RoC filing stated that it will use the funds to expand its business and strengthen its financial position. The company is going through a rough patch with regulatory hurdles in various states and drivers are up in arms against the company policy.

Ola’s initiative to raise funds comes at a time when ecommerce counterpart Flipkart announced its success in raising $1.4 billion from Tencent, eBay and Microsoft. Both Ola and Flipkart have raised their concern against US rivals’ capital dumping game plan to crush Indian companies.

Recently, media reported that RNT Capital Advisers, a venture fund setup by Tata Sons Chairman Emeritus Ratan Tata, along with New York-based hedge fund Falcon Edge Capital is making an attempt to invest in Ola.

RNT Capital, recently set up a $250-million corpus fund with University of California Investments (UC Investments) to invest in Indian companies.

Besides Japan’s SoftBank Group as major funder, Ola raised about $1.5 billion in funds from Tiger Global Management, DST Global, Matrix Partners, Accel Partners and Sequoia Capital.

Its highest valuation was $5 billion when it raised $500 million in a Series F round from Scottish investment firm Baillie Gifford, China’s Didi Chuxing and other investors in November 2015. It was brought down 40% in its another round in 2016.

While DST Global-led the investment of $400 million in a Series E round in April 2015, Ola also raised $210 million in its Series D round led by SoftBank in October 2014.

Founded by Indian entrepreneurs Bhavish Aggarwal and Ankit Bhati in 2010, Ola was valued at $4.8 billion in August 2015. While its revenues rose seven-fold to Rs 380.2 crore in FY 2015 from Rs 49.6 crore in FY2014, its net loss widened to Rs 754.8 crore from Rs 34.2 crore.
DH News Service