Ola Cabs may be raising $2 bn from SoftBank, Tencent in battle for market with Uber

Ride-hailing company Ola on Monday secured $2 billion in new funding from a group of investors, including SoftBank Group Corp and Tencent Holdings Ltd, Bloomberg reported, citing a person familiar with the matter. The funding round isn’t finished yet and the amount could change, the person said. The latest round of funding is expected to help Ola build war chest to take on global giant Uber, which has been aggressively trying to win market share in India. In November last year, Ola has raised Rs 1,675 crore from SoftBank. [caption id=“attachment_4088715” align=“alignleft” width=“380”]  Representational image[/caption] The funding is also backed by venture capital fund jointly run by industrialist Ratan Tata, the University of California’s investment arm and US institutional investors, Bloomberg said, citing people familiar with the deal. SoftBank subsidiary SIMI Pacific Pte picked 12,97,945 shares valued at Rs 10 at a premium of Rs 12,895 in ANI Technologies — which runs Ola — filings with the Registrar of Companies showed. The allotment of shares was done in November last year, it added. The latest funding, however, is believed to have come at a lower valuation. According to sources, the move comes at a time when Softbank is working on selling Snapdeal, an e-commerce platform it invested heavily in India, to larger rival Flipkart. The Bengaluru-based firm was aggressively looking at raising funds to compete with Uber, the world’s most valuable start-up. After selling its Chinese business to Didi last year, Uber has now set sights on India making it one of its top priorities. Though Indian Internet companies have seen a boom in user base, their valuations have come down as investors are now focussing on path to profitability and building a sustainable business model. Japan’s SoftBank has been looking to play consolidator in the country’s flourishing startup ecosystem with investments that include about $1 billion in e-commerce company Snapdeal and $70 million in grocery delivery group Grofers. Ola and SoftBank declined to comment, while Tencent was not immediately available for comment. Flush with private equity and venture capitalist money, many start-ups continue to have high burn rate that has been a concern for investors. Earlier this week, India’s largest e-commerce firm Flipkart raised $1.4 billion from Tencent, eBay and Microsoft in a round that saw its valuation fall from $15 billion to $11.6 billion now. (With inputs from agencies)