Watch out Uber: Ola Cabs just bought rival TaxiforSure for $200 mn
Taxi aggregators seem to be readying themselves to take on the global giant Uber, once the regulatory issues are cleared in India. Online cab aggregator Ola Cabs, which is backed by Japan's SoftBank, today announced that it has acquired its competitor TaxiForSure for $200 million ( Rs 1238 crore) in a cash and equity deal.
At $200 million, the deal is the second largest deal in the consumer internet space after Flipkart's $370 million acquisition of Myntra in 2014, and will make Ola the leader in taxi aggregator business in India with a valuation of over $2 billion.
And apart from taking on rival Uber, the move could also be aimed at lowering costs for Ola. Both the companies will continue to operate as separate companies.
A press statement from Ola said the leadership and all of the 1,700 employees shall continue to work with TaxiForSure, with Arvind Singhal (currently COO) being appointed the CEO.
Aprameya Radhakrishna and Raghunandan G, the founders of TaxiForSure, will contribute in an advisory role for a certain period.
TaxiForSure currently operates in 47 cities with over 15,000 vehicles registered on its platform.
Ola which is already the market leader in the personal transportation space has over one lakh vehicles on its platform and is present in 67 cities and wants to be present in over 200 by the end of this year. Compared to this, Uber is only present in 11 cities.
TaxiForSure follows a different model of supply and distribution by working with cab operators compared to Ola’s model of working with driver-entrepreneurs.
TaxiForSure also focuses heavily on the economy segment of cab consumers with innovative offerings like Tata Nanos as part of their fleet and Rs 49 as base fares.
For customers, drivers and operators on the TaxiForSure platform, nothing will change. Customers can continue to book a cab through the app and call centre and drivers will continue to get access to customers on TaxiForSure’s technology platform.
Bhavish Aggarwal, Co-founder and CEO, Ola, said, “Ola and TaxiForSure share the same vision of revolutionising urban mobility. TaxiForSure has a great team and they have built a very exciting business in a short time. There's a lot of complementary value in the strategy TaxiForSure has followed. I'm very excited to welcome the TaxiForSure team onboard and look forward to working with them towards realising our common vision.”
Raghunandan G, Co-founder and CEO, TaxiForSure, said, “TaxiForSure coming together with Ola will provide us with more opportunity than ever, to do what we do best. Post this acquisition; the combined entity will be strong enough and better capitalized to offer the best value to all our stakeholders, including our customers.”
Ola has been funded by Tiger Global, Matrix Partners, Sequoia Capital, Steadview Capital and most recently, Softbank over its four rounds of fund-raising.
Investors in TaxiForSure are Accel Partners, Bessemer Venture Partners and Helion Venture Partners. With this acquisition, investors in TaxiForSure will roll over their stock into Ola.
Over the past couple of months, cab aggregators have been buffeted by regulatory issues following the rape of a female passenger by an Uber driver in Delhi. Uber, valued at $40 billion, had seen its growth stall in the past two months after the incident. Uber, Ola and TaxiForSure were banned in Delhi and everyone's focus shifted to getting on the right side of the law. Which is why perhaps Ola buying TaxiForsure makes sense since consolidation will help give players scale, reduce the number of competitors, and give users access to certified drivers.
In an interview with Firstpost, TaxiForSure’s Chief Technology Officer Amitava Ghosh shares how technology is the backbone of the company’s operations. Data Science seems a big factor...
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