Taxi aggregator Ola is close to raising $300 million from Russian venture capitalist Yuri Milner-backed DST Global and other investors.
It is reliably learnt that DST Global has invested $185 million and the remaining funding has come from Accel, Bessemer, Helion, Tiger Global, Steadview Capital, Internet Fund and others in the form of convertible preference shares in ANI Technologies, the owner of Ola. When contacted, a company spokesperson declined to comment.
However, according to industry sources, Ola was keen to raise around $500 million but has managed to raise this quantum of funding, which is its largest.
In October 2014, Ola raised $210 million in funding, which was led by Softbank Internet and Media along with other investors, including the ones such as Accel which had invested in TaxiForSure (which was acquired by Ola).
These investments are coming in at a time when there is a large pent up demand, which has made well-funded multinationals such as Uber to expand its presence in India.
Ola was founded by Bhavish Aggarwal and Ankit Bhati in 2011 in IIT Bombay with a vision to revolutionise urban mobility. While the company does not own its fleet, it helps entrepreneur drivers with capital and technology and funds them for their rides, which is in the range of ₹13 per kilometre. Ola provides 100,000 vehicles in 67 Indian cities.
The Indian taxi services market is mainly dominated by the unorganised sector, but the organised radio taxi services market has been growing in the last few years, industry watchers opine.
According to TechSci Research, the number of radio taxis plying on Indian roads has witnessed a tenfold increase between 2009 and 2013.
However, this business is highly capital intensive and as drivers are paid a commission by these companies on the number of rides undertaken, taxi companies are burning cash at a quick pace. “These companies need a lot of funding to fuel their expansion plans,” said Renil Reddy Komitla, President of taxi service YatraGenie, which operates in Bengaluru and Hyderabad.