Ola to invest $100 million in mobility startup Vogo2 min read . Updated: 19 Dec 2018, 02:11 PM IST
Ola funding, to be paid out in tranches, will raise its stake in scooter-sharing startup Vogo to 30%
Bengaluru: India’s leading cab-hailing service Ola (ANI Technologies Pvt. Ltd) has agreed to invest an additional $100 million in scooter-sharing startup Vogo as part of a new strategic alliance that effectively signals Ola’s entry into the scooter sharing space.
Separately, Vogo is also in advanced talks to raise an additional $10-12 million as part of a Series B round from new investors such as Kalaari Capital, and other existing investors, according to three people aware of the developments. That deal is expected to close over the coming days, they added. All the three people requested anonymity as the discussions are confidential.
As part of the strategic partnership, Ola said the investment would help Vogo add at least 100,000 new scooters. The supply deal is expected to be financed with a mix of equity and debt, and Ola will become the largest shareholder in Vogo, holding a stake of at least 30%, according to the people cited above. The $100-million commitment from Ola will be paid out in tranches, they added.
Despite the sizeable investment from Ola, Vogo will continue to operate as an independent start-up, the people cited above said.
Earlier this year, Vogo raised $6-7 million in a Series A funding round led by Ola, Matrix Partners, Stellaris Venture Partners and Hero MotoCorp chairman Pawan Munjal. Ola said the new funding would give Vogo a supply advantage without needing to raise additional capital in the future. Ola also said Vogo’s services would soon be available on its mobile app.
“Our investment in Vogo will help build a smart multi-modal network for first-last mile connectivity in the country. Vogo’s automated scooter-sharing platform, backed by Ola’s expertise in this space can help transform our cities," Ola co-founder and CEO Bhavish Aggarwal said in a statement.
Last September, Vogo raised an undisclosed sum as part of a seed round from AV Thomas Group chairman Ajit Thomas, former Formula One driver Karun Chandhok and other individual investors.
Ola’s bet on Vogo underscores its growing interest in expanding beyond cabs and becoming a one-stop platform for urban transportation. Earlier this year, Ola bought transportation information provider Ridlr (Birds Eye Systems Pvt. Ltd) to expand its fledgling public transportation business that has become an important front in its fight against rival Uber.
In December, Ola started testing a bicycle sharing service called Ola Pedal in IIT Kanpur.
“Vogo has seen rapid growth in the last five months, growing over 10x in scale. We are thrilled to have Ola join us on this journey and help turbocharge our growth by providing us access to strategic and capital efficient supply as well as access to millions of customers on its platform in the time to come. As we enter into our next phase of growth, we look forward to executing our synergistic vision of the future: smart and sustainable mobility for all," said Anand Ayyadurai, founder and CEO of Vogo.
The bike rental space has spawned several early-stage ventures over the past two years. Mint reported on 2 November that at least half a dozen new mobility start-ups are in advanced talks to raise large amounts of capital from investors.