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Ride-sharing app Ola has hit the jackpot with its largest fund raise to date, of $1.1 billion, as it prepares to further its lead over arch rival Uber.
Ola is also in advanced talks with other investors to close an additional $1 billion, concluding a total raise of $2.1 billion, as a part of the current financing round, the company said in a statement.
This latest round was led by Chinese internet behemoth Tencent Holdings Ltd with participation from SoftBank and new US-based financial investors. The company has so far raised over $4 billion in funding.
The fresh funding will be used to make investments in supply, technology and cutting-edge innovations that will take the company closer to its vision of providing mobility to a billion people. Bhavish Aggarwal, co-founder and CEO of Ola, said: “Our ambition is to build a globally competitive and futuristic transportation system in India that will support and accelerate a nation on the move. Our new partners share our passion for building the future of transportation in India together and we look forward to learn and benefit from their global perspectives and ecosystems.”
Ola, with its network of 8 lakh driver partners, is currently present in 110 cities across the country with over 14 different transportation service categories.
It has managed to consistently maintain its lead over Uber with unique offerings that cater to the entire gamut of customer needs from Ola Auto-rickshaws, already available in 73 cities, Ola Bikes available in 13 cities to Ola Outstation, Ola Rentals, Ola Shuttle, Ola Share as well as the sedans equipped with the connected car entertainment platform – Ola Play.
In contrast, Uber with 4.5 lakh registered driver partners is available in just 29 cities, with 8 transportation service categories including UberGo, UberX, UberPremier, UberMoto, UberHire, UberEats. While Uber is betting big on India as one of its top growth markets after its exit from China last year, its growth has been stymied by multiple internal and external factors including sexual allegations by a former employee that put its internal workings under the scanner, ultimately resulting in CEO Travis Kalanick’s exit. Allegations of accessing the medical records of an Indian customer who was raped by one of its drivers, thereby violating privacy laws, and more recently when it had to face the backlash of irate drivers who protested for weeks to receive better returns and working conditions.
Eyeing new markets Pointing out that Ola has always been one step ahead of Uber, proactively providing for customer needs, be it Ola Auto-rickshaws or Ola Rentals or Ola eBikes, Mrigank Gutgutia, Engagement Manager at RedSeer Consulting, said: “The fresh funding will be used to increase spend in new markets to build out the driver ecosystem where it will dish out high incentives to onboard new drivers, in creating consumer awareness and advertising and deeper investments outside the top 10 cities in the 100 cities where it operates. In the long term, Ola will invest in technology, new products to outpace and stay ahead of competition.”
With $2.1 billion in Ola’s kitty combined with Uber’s deep pockets, the cab-hailing market is all set to see high action as both players face off with renewed vigour for market supremacy.
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