In Ola-Lyft-Didi-Grab alliance against Uber, curious role of Tiger Global is in focus
Lack of transparency is definitely a major issue that can have serious repercussions if not now, sometime in the future
Uber had it coming. The rivals -- taxi companies and also unorganised taxi drivers -- resented the dominance of the vehemently funded aggregator right from the beginning. The disruption that Uber brought about in the global taxi market was just unreconcilable for them. They said Uber, a giant, is getting many unfair advantages.
Interestingly, even as the rivals teamed up against Uber yesterday, with OlaCabs joining forces with Didi Kuaidi of China, Lyft of the US and GrabTaxi of Singapore, the US-based company is now reportedly raising another $2.5 billion at a valuation of $62.5 billion.
"The new funding shows Uber is accelerating its race to expand globally and branch into services beyond picking up and dropping off riders," says a Bloomberg report. The company had a few months back started services like food delivery in select cities.
While Uber's aggressive expansion and diversion of services is indeed noteworthy, a more curious aspect of its latest round of fund raising is the role of Tiger Global, a secretive private equity and hedge fund company , that has backed many Indian startups, including Flipkart and Ola.
According to the Bloomberg report, the investors in this round for Uber includes Tiger Global. The other investor whose funding has been closed is T Rowe Price, says the report.
According to CrunchBase, a website that provides data about startup funding, Tiger Global has raised more than $34 billion until now and has made 171 investments in 109 companies. The company was started in 2001. Recently, it had raised another $2.5 billion.
The company has made 18 investments in India. This includes Shopclues, News in Shorts, Quikr, LocalOye, PolicyBazaar etc.
However, according to media reports, the fund is presently going slow on India as it is pushing for consolidation in an overheated startup segment in India.
Tiger Global's involvement in Uber's fund raising has already raised many eye brows.
“I am furious. This is a direct conflict. They’re arming (Ola’s) closest competitor with hundreds of millions,” an investor in Ola has been quoted as saying in a Forbes article.
“I’m sure it’s going to upset a lot of people and blow a lot of relationships for them,” another venture capitalist has been quoted as saying in the same article.
However, it has to be noted that the company's investment strategy has been along these lines.
Earlier this month, there were reports that Tiger Global has raised stake in Amazon, even as it remains invested in its Indian rival Flipkart. That's not all, it has invested in JD.com, while it backs Alibaba.com, its rival.
While the fund remains mum (it doesn't even have a website) on all these developments, it is not hard to guess what it is up to: making money by hook or by crook.
True, there are no laws that prohibit investing in rival companies and so there is technically nothing illegal in what the fund does. But lack of transparency is definitely a major issue that can have serious repercussions if not now, sometime in the future.
The fund-raising exercise, if successful, would push Ola's valuation to over $4 billion
Ola intends to fund its continued expansion across India with the new capital
Media reports say Ola is gearing up to raise more funds to take on Uber