Ola scored $2 billion in new funding from a group of investors, including SoftBank Group Corp. and Tencent Holdings Ltd, according to a person familiar with the matter, helping to bankroll Uber Technologies Inc.’s fiercest rival in India.
Other backers in the online taxi start-up’s latest funding round included a venture capital fund jointly run by Ratan Tata and the University of California’s investment arm, as well as several US institutional investors, people familiar with the Ola funding said, asking not to be identified talking about a private deal. The company’s valuation after the financing wasn’t immediately clear.
The deal will help Ola to continue its focus on India and build both its supply of vehicles and drivers as well as strategic technology to help it win against Uber, one of the people said. The funding round isn’t finished yet and the amount could change, the person said.
Ola, whose parent is ANI Technologies Pvt. Ltd, and Uber are competing in one of the world’s most attractive ride-hailing arenas. Ola currently holds the upper hand in the $10 billion Indian market, but Uber has been increasing the pressure via driver incentives and promotions targeted at its rival’s existing markets. The San Francisco-based company is ratcheting up spending in other emerging markets after ceding China to rival Didi Chuxing.
Ola didn’t immediately respond to a request for comment. A spokeswoman for SoftBank declined to comment.
Ola has received other financing but the latest cash influx marks the second-largest funding round in an Indian start-up, after Flipkart Online Services Pvt. Ltd, the country’s largest online retail firm. The SoftBank Vision Fund and Tencent also invested a total of about $4 billion in Flipkart this year as it vies with Amazon.com Inc., people familiar with the matter have said.
The Ola funding round, which is nearing completion, already has participation from one of SoftBank’s investment arms, SIMI Holdings Inc. It wasn’t immediately clear if SoftBank’s $93 billion Vision Fund would participate. SoftBank is also considering a multibillion-dollar investment in Uber. Ola’s previous investors include Tiger Global Management, DST Global, Accel and Sequoia Capital.