While there has been a lot of buzz among major home-grown e-commerce firms getting mega funding commitments from existing and other overseas investors of late, India's taxi hailing company Ola, too, has been in the reckoning and is in talks to raise capital.
In order to maintain further lead over its US taxi hailing rival Uber, the Bengaluru-based taxi aggregator is looking to raise fresh capital of Rs 650 crore from investors led by Tata Sons chairman emeritus Ratan Tata's venture fund RNT Capital Advisers, said a report The Economic Times.
Besides RNT Capital, Ola is also raising resources from New York-based hedge fund Falcon Edge Capital, which is expected to infuse $40 million while the rest will come from Tata-backed venture fund.
Separately, Ola is also in negotiations to raise $200 million from a series of investors.
If the proposed fund raising deal fructifies, Ola's valuation will reach $3.5 billion from $3 billion when it last raised capital from Japan's SoftBank in November last year, the ET report said.
So far, Ola has raised nearly $1.5 billion in capital from several investors.
However, reports of investors losing money on their startup investments continue to remain a bigger cause of concern. Recently, SoftBank Corp said it had booked an investment loss of 39.28 billion yen ($350 million) on its investments in India, including those in cab-hailing firm Ola and e-commerce company Snapdeal.
SoftBank had led a $210-million investment in Ola in 2014, and also made follow-on investments in the company.
Even as San Francisco-based rival Uber has been fast expanding its services acorss the country, Ola still remains a dominant player with a market share of around 65 percent with the rest being held by Travis Kalanick-based taxi aggregator firm.
Not just the rising competition, both Ola and Uber are battling several challenges here with driver going on strike over cut in incentives.
Last month, a section of drivers of Uber and Ola Cabs went on a token one-day strike in Mumbai protesting against the cut in incentives they are getting from the companies and the resultant fall in incomes.
The drivers of both the companies had resorted to strike in various other cities, including Hyderabad, Delhi and Bangalore, raising the demands for higher incentives.
In order increase their profitability, both Ola and Uber increased the fares by 50-70 percent last month.
Published Date: Apr 03, 2017 16:03 PM | Updated Date: Apr 03, 2017 16:03 PM