Ola on Monday bought rival TaxiForSure for $200 million (₹1,200 crore) in a cash-and-stock deal that will give the country’s largest taxi aggregator more muscle to take on global player Uber.
The acquisition — the second-largest in the online space in India — is also the first move towards consolidation in the Indian personal transportation segment. The online taxi hailing industry in the country is estimated at $7-8 billion. Online market player Flipkart had bought fashion portal Myntra for about ₹2,000 crore last year.
Under the terms, Ola and TaxiForSure will continue to operate as separate entities and Arvind Singhal, currently chief operating officer of Ola, will be the CEO of TaxiForSure. The co-founders of TaxiForSure, Aprameya Radhakrishna and Raghunandan G, will move to an advisory role, company officials said. Also, all the 1,700 employees of TaxiForSure will continue working for the entity.
Ola has been funded by a clutch of investors, including Tiger Global and SoftBank. It raised $210 million during the last round. Investors in TaxiForSure include Accel Partners and Bessemer Venture Partners.
Ola was founded by Aggarwal and Ankit Bhati in 2011 in IIT-Bombay. TaxiForSure, which took off a few months later, has around 15,000 cabs on its rolls, with 2.5 million unique customers and has completed five million rides so far. Ola has a network of 100,000 vehicles in 67 Indian cities. Industry watchers said both the companies complement each other. TaxiForSure works with fleet operators while the Ola model works mostly with driver-entrepreneurs.
“Ola is leveraging technology to revolutionise ground transportation and is aggregating the highly fragmented cab and car rental market,” said Avnish Bajaj, co-Founder and Managing Director, Matrix India.