With ample cash to match Uber's war chest, Ola is on course to expand its lead over the San Francisco-headquartered rival
The app-based taxi war in India has become even fiercer with homegrown unicorn Ola bagging a $400-million breather from China’s Tencent, taking total funds raised in the last 12 months to about $800 million. Softbank and Ratan Tata’s UC-RNT fund are among the others investors to back Ola in the past year.
Arch-rival Uber, the most valuable startup globally at $70-billion, can no longer afford to just sit back and take note.
When Ola hit the markets in June last year to raise fresh funds, it wasn't the best of times. A lack of returns had made investors wary of Indian startups. Ola, the market leader, was also caught in the quagmire and saw its value erode from a peak of $5 billion in 2014 to $3.5-4 billion.
Nevertheless, it ended up bagging enough funds to turn the tables on Uber. According to a recent report by Bloomberg, the $800 million is part of a larger round that could go up to a whopping $2 billion.
The fresh funds and the turbulence at Uber headquarters in San Francisco – founder Travis Kalanick has been forced out of the chief executive’s role by investors, and former Expedia executive Dara Khosrowshahi has taken over as chief executive – have provided Ola an opportune moment to step on the gas and expand its lead on Uber.
To be sure, Ola has consistently held fort against Uber. Though the companies have traditionally sparred over market share numbers – Ola, in the past, claimed three-fourth market share in the country – industry executives say Ola’s share stands at about 60 percent. According to them, Ola is well-positioned to lead the land grab.