Ola says it raised Rs384 crore from Vanguard Group in December 2015

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Bengaluru: Ride-hailing service Ola (ANI Technologies Pvt. Ltd) disclosed on Wednesday that it raised Rs.384 crore ($57.3 million) in December from a US-based investment management firm, close on the heels of raising about $500 million (Rs.3,345 crore) from a consortium.

The money was raised from Vanguard Group Inc., Ola said in documents filed with the Registrar of Companies on Wednesday. The cab aggregator hadn’t disclosed the fund raising earlier.

Vanguard Group, with headquarters in Pennsylvania, has about $3.1 trillion of assets under management. It has inves-ted in some of the biggest technology firms globally, including Amazon.com Inc., Facebook Inc., Alphabet Inc., Microsoft Corp., PayPal Holdings Inc. and eBay Inc., among others.

In India, Vanguard invested in Flipkart Ltd as part of Series G and H funding rounds, when the Indian e-commerce firm raised $1 billion in July 2014 and $700 million in December 2014.

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The disclosure of investment by Vanguard puts Ola at risk of its valuation being open to public scrutiny as has been the case with Flipkart in the last six months.

The markdowns in Flipkart’s valuation came to the fore after a couple of its publicly-listed investors informed the US Securities and Exchange Commission (SEC) about the status of their portfolios.

Similarly, Vanguard’s disclosure to the SEC might put the spotlight on Ola’s valuation.

Ola’s last publicly announced round in November last year, when it raised $500 million, valued the company at about $5 billion. The consortium of investor, included China’s Didi Chuxing and Japan’s SoftBank Group Corp.

Ola did not respond to an email seeking comment.

A number of so-called unicorn start-ups (those valued at $1 billion or more) across the globe, including Uber Technologies Inc., Airbnb, Cloudera Inc. and Dropbox Inc. have had their valuation slashed by investors in the last six months.

Closer home, Flipkart’s valuation has been marked down on multiple occasions by a number of its publicly-listed investors. While the company was valued at $15 billion in July last year, when it raised $700 million, the recent markdowns by the likes of Vanguard, Morgan Stanley and T Rowe Price have brought down the company’s valuation to about $10 billion.

Ola, however, has not suffered any markdown in its valuation yet. The company is in talks with investors to raise about $300-400 million as it gears up to fill its coffers to counter rival Uber’s deep pockets.

The company, India’s third-most valuable start-up, is talking to both new and existing investors such as Didi Chuxing and SoftBank Group, according to two people with knowledge of the development who spoke on condition of anonymity.

Like in its last fund-raising of $500 million, the company may first get funds from existing investors and then top them up with cash from new investors, Mint reported on 15 June.

Ola’s fund-raising efforts come at a time when the company has regained the initiative from Uber in the race to dominate India’s booming cab-hailing business.

Over the course of 2015, Uber significantly increased its market share by spending heavily on recruiting new cabs, paying huge subsidies to drivers, offering attractively low prices to customers and by accepting cash payments from riders.

Uber’s market share soared to roughly 40% at the beginning of this year from just 5% a year ago, according to Uber executives.

To win back market share, Ola launched Micro, the cheapest cab offering in the market in March, which has transformed Ola’s fortunes, at least for now.

Uber, the world’s most valuable start-up, said this week that it will merge its China unit with Didi Chuxing in a deal that values the merged entity at $35 billion, according to reports in Bloomberg and other news outlets.