Ola gets Rs670 crore from Ratan Tata, Falcon Edge

Ratan Tata and Falcon Edge investments in Ola were part of the November funding round when Ola raised Rs1,675 crore from SoftBank


Bhavish Aggarwal, founder of Ola (ANI Technologies Pvt. Ltd).
Bhavish Aggarwal, founder of Ola (ANI Technologies Pvt. Ltd).

Bengaluru: Ratan Tata’s RNT Capital Advisers and existing investor Falcon Edge Capital invested Rs670 crore in Ola in the November funding round in which the cab aggregator raised Rs1,675 crore from SoftBank Group Corp., according to regulatory filings.

Tata, chairman emeritus of Tata Sons Ltd, had invested an undisclosed amount in Ola, run by ANI Technologies Pvt. Ltd, in his personal capacity in July 2015.

Documents filed with the Registrar of Companies and sourced from research firm Tofler show that Falcon Edge ploughed Rs402 crore into Ola and RNT Capital Advisers, a collaboration of Tata’s privately held investment firm RNT Associates Pvt. Ltd and University of California, invested Rs268 crore. Fresh shares were issued to both Falcon Edge and RNT Capital at Rs13,511 apiece.

Incidentally, Ola issued shares to SoftBank at Rs12,895 apiece in November, regulatory filings show, which implies that the company’s valuation had risen by about 4.8% in the latest funding round.

Ola did not respond to an email seeking comments. Emails sent to RNT Capital and Falcon Edge on Wednesday evening remained unanswered as of press time.

The home-grown online taxi firm, which has been trying to raise fresh capital since June 2016, is in talks with new investors to get at least $300 million more. If Ola gets new investors, SoftBank will invest more in the company, Mint reported on 14 April. For the SoftBank round in November, the valuation of Ola, which has so far raised nearly $1.5 billion in cash, dropped to about $3 billion on a pre-money basis.

Pre-money refers to the valuation excluding the current round’s cash infusion. Ola’s post-money valuation will be determined by the exact amount of capital it finally attracts, Mint reported on 14 April.

Ola is locked in a bruising battle with the local unit of Uber Technologies Inc., the world’s most valuable and deep-pocketed start-up, for dominance of India’s cab-hailing market. After it sold its Chinese business to Didi Chuxing in August, succeeding in India became one of the top priorities for Uber.

Ola reported 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.

As per documents sourced from Tofler, Ola posted revenue of Rs758.23 crore in 2015-16, compared with Rs103.8 crore in the previous year. Its loss nearly tripled to Rs2,313.7 crore from Rs796 crore in the same period.

Ola and Uber together clocked a nearly four-fold increase in the number of rides booked through their platforms in 2016 from a year earlier, according to a report by market research and advisory firm RedSeer Management Consulting Pvt. Ltd.

Ola and Uber together completed about 500 million rides in 2016, as against about 130 million rides the year before, according to the report. While Ola and Uber did not comment on the numbers, industry and company executives said Ola clocked about 6 million weekly rides on average between September and December last year across its offerings of cabs, autorickshaws and shuttle buses, Mint reported on 17 February.

Uber India president Amit Jain said in an interview in September that Uber’s completed trips had risen from 1.6 million in January 2016 to 5.5 million at the end of August.

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