Taxi hailing app company Ola is engaged in close discussions with China's internet major Tencent to raise $400 million, a move that will help it compete better with the cash-rich US rival Uber in India.
The fund-raising exercise, if successful, would push Ola's valuation to over $4 billion, The Economic Times report said.
"Tencent executives were in Bangalore last week and they met the Ola management team to discuss the transaction," the ET report said quoting a person aware of the development.
Since November last year, the taxi aggregator has raised $400 million and the likely investment will take total fresh investment in the company to $800 million.
The deal, if it goes through, will be Ola's largest fund raising exercise in about two years, since it raised $500 million from a clutch of investors like Singapore's sovereign wealth fund GIC, China's largest taxi aggregator Didi Chuxing and Scottish investment fund Baillie Gifford, among others, in 2015, The Times of India report said.
Also, the fresh investment will allow Ola to get a heavyweight investor like Tencent to curb the growing dominance of SoftBank, which is the largest shareholder in the company.
"The deal with Tencent is an extension of the funding round which kicked off last year. Ola wanted to get a more strategic investor with a long-term view of the market which is where Tencent fits in," TOI report said quoting a person familiar with the development.
Besides Tencent, Ola is also in talks with US technology major Microsoft for its participation in the second round of investment, but talks are yet to reach the advanced stage.
So far, Ola has mopped up $1.7 billion and the latest fund raising initiative will take total investment in the company to $2.1 billion.
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Updated Date: Jul 27, 2017 14:49:42 IST