Bengaluru: Ola Cabs, which is run by ANI Technologies Pvt. Ltd, reported a seven-fold revenue growth in the year ended 31 March 2016, but losses nearly tripled at India’s largest cab hailing start-up on the back of heavy discounts to customers and spending on incentives to its drivers.
According to regulatory documents sourced from data platform Tofler, Ola posted revenue of Rs758.23 crore in 2015-16, compared with Rs103.8 crore in the year-ago period. Losses nearly tripled to Rs2,313.7 crore from Rs796 crore in the same period.
However, the revenue figure Ola reported for the 2014-15 financial year in the latest regulatory filings appears to be different from the number it reported last year.
Last year, Mint reported that Ola registered an eight-fold jump in revenue, driven mainly by discounts and driver incentives that in turn was fuelled by two large funding rounds that helped it widen its lead over arch-rival Uber Technologies Inc. Ola at the time had reported full-year revenue of about Rs418 crore in the 2014-15 financial year, according to filings that the company posted in June last year. However, in the latest filings, Ola has said it posted revenue that was nearly a quarter of that figure at Rs103.8 crore.
Mint reached out to Ola for a clarification on the numbers and an explanation on the disparity between the two figures, but the company did not immediately respond to requests for comment.
Cab-hailing services such as Ola and Uber generate revenues from the commission that they charge drivers.
Ola is currently locked in a bruising market share battle against US-based Uber Technologies, which has witnessed exponential growth over the past three years in India. After losing ground to Uber in 2015, Ola recovered last year after launching Micro, its cheapest offering so far. Ola claims it is twice the size of Uber whereas the numbers disclosed by the latter indicate that the two companies are running neck and neck.
The outcome of this battle—along with a similar battle that is currently playing out in the online retail market between homegrown “unicorn” start-up Flipkart against e-commerce giant Amazon—could well define the future of India’s fast-growing start-up ecosystem.
To fight off Uber, Ola has turned to its deep-pocketed investors, mainly Japan’s SoftBank, to raise funds that will help fuel its growth and expansion, in what has so far proved to be an expensive and long-drawn-out market share battle. Ola has so far raised nearly $1.5 billion over the past three years from a clutch of investors such as SoftBank, Sequoia Capital, Accel Partners and DST Global and is presently in talks to raise even more.
Earlier in April, Mint reported that Ola received Rs1,675 crore from SoftBank in November as part of a bigger funding round that would lower the company’s valuation to about $3 billion from $4.5 billion. Mint also reported on 21 April that Ola is likely to raise another $100 million from investors, citing regulatory filings filed by the company.
Ola, which has been trying to raise fresh capital since last June, is in talks with new investors to get at least $500 million more, Mint reported then. If Ola gets new investors, SoftBank will invest more in the company.
After selling its Chinese business to Didi Chuxing last August, succeeding in India became one of the top priorities for Uber and many investors have expressed reservations about backing an Uber rival, while simultaneously raising doubts about the long-term viability of the resource-intensive cab hailing business.