Economy

Ola raises $2 billion from Softbank, Tencent, other investors

Ola raises $2 billion from Softbank, Tencent, other investors”

Ola scored $2 billion in new funding from a group of investors including SoftBank Group Corp. and Tencent Holdings Ltd. A representative for Ola declined to comment on queries emailed by ET.

According to the publication, other investors include UC-RNT fund, a joint venture between Ratan Tata's RNT Associates and the University of California, and several U.S. institutional investors. The company was reported to have raised $330 million on a $3.5 billion valuation in February but Ola did not confirm the round.

The new funding to Ola is run by venture capitalist fund jointly run by industrialist Ratan Tata, the University of California's investment arm and USA institutional investors, the report said. Ola will have to deliver on certain goals the Japanese investor has set, drawing from its knowledge of the ride-hailing business with investments in Didi Chuxing and Grab Taxi.

As per a report by Business Standard, apart from all the other funding that Ola can receive, the UC-RNT Fund, a born of a partnership between former Tata Sons chief Ratan Tata and the University of California's investment arm, could plough $50 million into Ola.

The valuation of the new round is not known, but given that the company seems to be losing market share to Uber and it was reportedly unable to match revenue growth with its peers such as Lyft Inc., there's a strong possibility that the funding could be a "down round" worth less than $5 billion.

Once this round of funding goes through it is expected to help Ola go up against global giant Uber, which has been aggressively trying to capture more market share in India.

The USD 2.5-billion funding in Flipkart by SoftBank was made through SoftBank Vision Fund, the world's largest technology-focused fund.

Earlier this year, Uber exited direct operations in Russian Federation.

The deal on the first United States dollars 1 billion is expected to be closed soon and will not see participation from Ola's largest investor, SoftBank.

Since the beginning of this year, Ola has so far raised $150 million from RNT Capital Advisors, US hedge fund Falcon Edge, and New York-based hedge fund Tekne Capital Management.

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. SoftBank is also said to be considering investment in Uber.



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