Ola in Fresh Funding Talks; can Raise up to USD 400 mn

By Gizbot Bureau

| Published: Saturday, April 11, 2015, 12:27 [IST]

App-based taxi aggregator Ola is in talks to raise fresh funding of up to USD 400 million (about Rs 2,500 crore) from a clutch of investors including DST Global, sources said.

Ola in Fresh Funding Talks; can Raise up to USD 400 mn

Ola is locked in intense negotiations over the new round of funding as investors are closely "studying the firm's future plans," sources close to the development said.

This "may take a while" however, they said, adding that while there is "no doubt" that investors are interested in the firm but they are also considering various issues.

"They want to know Ola's plans on how they intend to retain and expand their driver base, considering that payment of commission to the drivers is a huge burden on any company's reserves," they said.

Another area that investors want clarity on is how the firm plans to expand the food delivery services and the impact on the firm's balance sheets, they added. Ola declined to comment on the developments.

"So they are interested in the firm, but they are closely studying the growth and future prospects. TaxiForSure was taking a big hit in maintaining its fleet of cabs and paying commission to drivers.

So, the investors are studying Ola's plans on how it intends to deal with such issues," the sources said. Without revealing the amount being raised, another source said: "The funding round, on which talks are in advanced stages, is much more than that what is being said."

Sources said that the amount can be in the range of USD 400 million. However, a market insider said the talks are taking time as investors are still mulling on the amount to be invested in the company.

"The company has bright prospects and with acquisition of TaxiForSure they look brighter. But, I would not be surprised if investors give a smaller amount this time with assurances of raising the kitty after watching the firm's performance for sometime," the banker said.

Meanwhile, the Bangalore-based firm has signed a MoU with Empower Pragati (EP) and Automotive Skills Development Council to create 50,000 women drivers, a move being viewed as an attempt by the firm to further ram up its driver base particularly targeting women consumers.

EP is an investee company of National Skill Development Corporation (NSDC). Through the Memorandum of Understanding, Ola will provide training, skill development and empowerment of women drivers on its platform, Ola said in a statement.

The programme will be rolled out initially here followed by Mumbai, Bangalore, Hyderabad, Chennai and Pune spanning into cities across India in the next few months.

Once candidates acquire driving licenses and commercial badges as mandated by the government, Ola would help them with opportunities as chauffeurs with selected fleet operators on the platform or assist them in buying a car.

Source: PTI