Home / Companies / Ola to apply for mobile wallet licence, in talks to raise funds

India’s largest cab-hailing service, Ola, which is in advanced talks to raise a new round of funds, plans to apply for a mobile wallet licence and launch a cab-sharing service this year as the company seeks to ensure compliance with laws and accelerate its expansion into new businesses, said two people familiar with the matter.

Ola, promoted by ANI Technologies Pvt. Ltd, currently offers Ola Money as a digital payment option on its mobile app, using payment technology powered by PayU and ZipCash Card Services Pvt. Ltd, which has a wallet licence from the Reserve Bank of India (RBI).

India’s third-most valuable start-up now plans to apply to RBI for a semi-closed wallet licence of its own, the two people cited above said.

If Ola gets the nod from RBI, it can offer the wallet on its app as well as on other apps it plans to launch.

Current regulations don’t allow marketplaces to offer closed wallets on their platforms. But a company that has a semi-closed wallet can offer digital cash payments to multiple merchants in a marketplace.

Since Ola works as a marketplace, in which it connects customers with drivers using technology, offering a semi-closed wallet would ensure it complies with the law.

Separately, Ola is also working on introducing a cab-sharing service, tentatively called Ola Share, said the two people cited earlier, who spoke on the condition of anonymity as they aren’t allowed to speak with reporters.

The service will allow users to split fares and share cabs with other people.

Ola did not respond to an email seeking comment.

Ola has been expanding into new businesses to diversify its business model, tracking similar moves by rival Uber Technologies Inc. in the US. Mint reported on 16 March that Ola will enter two new businesses, product deliveries and mobile-based navigation technology.

Over the past three months, it has also launched a food delivery service called Ola Café and an independent grocery-ordering app called Ola Store. The company is also introducing a bus aggregation service this year.

Uber is already delivering groceries, food and e-commerce products in the US and also has a cab-sharing service.

Ola is close to raising $500 million at a valuation of $5 billion from existing investors which include SoftBank, Tiger Global Management and Sequoia Capital, The Economic Times reported on 28 July. Mint reported the talks first on 21 May. The company raised $400 million from Russian hedge fund DST Global, SoftBank Group and Tiger Global Management in April.

Over the past year, Ola has become one of India’s fastest-growing start-ups. Poor transport infrastructure and a shift in consumer habits towards convenience and on-demand services have fuelled the booming demand for cab services such as Ola and Uber.

Ola bought smaller rival TaxiForSure in a $200 million deal in March to increase its lead over Uber. The company now claims to have an 80% market share.

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