Bengaluru: Ola Electric Mobility Pvt. Ltd has raised about $250 million from SoftBank Group Corp., thus becoming the second company founded by Bhavish Aggarwal to join the coveted unicorn club of startups valued at more than $1 billion.
Ola Electric raised the funds as part of its Series B round, according to the company’s filings with the Registrar of Companies.
This investment also merits attention as Aggarwal had earlier opposed SoftBank’s efforts to increase its stake in Ola, the ride-hailing service run by ANI Technologies Ltd. Aggarwal was trying to restrict the rights of powerful investors to prevent them from wresting control of the company he founded.
On Tuesday, Aggarwal tweeted: “Celebrating 5 years of strong partnership, looking forward to the years ahead! I’m personally inspired by @masason (SoftBank founder Masayoshi Son) vision for the future of humanity. Very excited about our partnership to build Mobility & Electric Mobility for India and the world."
Ola declined to comment for this story.
Ola Electric, incorporated in February 2017, was a wholly-owned unit of ANI Technologies until March, when Tiger Global and Matrix Partners India made a ₹400 crore investment in the company. This was followed by an undisclosed investment by Ratan Tata in May. Now, ANI Technologies holds a minority stake in the company. Ola Electric is led by Anand Shah, who had previously worked with the likes of Audi and BMW, and Ankit Jain, who headed Ola’s connected vehicle platform.
With this round, Ola Electric joins the club of India’s fastest unicorns, after Udaan and Paytm Mall. B2B e-commerce firm Udaan reached unicorn status in September after raising $225 million, 26 months after its registration. E-commerce firm Paytm Mall, which was hived off from its parent, One97 Communications Ltd, in mid-2016, became a unicorn April 2018.
The new infusion of funds into Ola Electric is expected to help the firm reach its goal of introducing one million electric vehicles on Indian roads by 2021. The company is running several pilots to test electric vehicles and the charging infrastructure for batteries.
SoftBank’s investment in Ola Electric comes at a time when the Indian government is trying to encourage the use of electric vehicles to curb vehicular pollution and reduce the country’s oil import bill. Experts tracking the Indian startup ecosystem say electric vehicles are a big opportunity, which is why large funds such as SoftBank would want to get in early on.
“The government’s push to electric vehicles is a positive sign for investors because infrastructure is extremely important for electric vehicles," a person, who has invested in several mobility startups, said on condition of anonymity. “While the upfront cost for electric vehicles is high, the variable cost goes down by 20%, making Ola Electric an attractive proposition."
The Indian electric car market size was valued at $71.1 million in 2017 and is projected to reach $707.4 million by 2025, according to Prescient and Strategic Intelligence Pvt. Ltd.