Ola Cabs Aims Profitability by 2019
Ola — the first name that usually comes to your mind when you step out for office. This company has become well-renowned for its service and affordability among the Indian household.
A journey which started by Bhavesh Aggarwal and Ankit Bhati to provide seamless cab service at an affordable price began when Bhavesh had to face harsh experience with an cab service while he was working at his tours and travel startup.
Tiger Global’s Exit
Tiger Global which has been an early investor in Ola and has seen it grow from a small startup to a Billion Dollar Unicorn will make a partial exit as an investor in Ola by selling its 7.5% stakes to Softbank.This will make Softbank the largest shareholder in the ride-sharing startup if the deal goes through. But this deal has to be approved by the founders of Ola.
This move comes after Lee Pixel, Partner at Tiger Global Management, had stepped down from the board of Ola. Tiger Global is planning to sell its stake in Flipkart too after analysing revenue benefits from Indian market. Tiger Global, a US-based investment firm has been on Ola’s board since March 2012 when it led a Series A funding.
Ola projects profitability
Ola is projected to become profitable during 2018-19 with net operating profit Rs.1170 Cr which will grow to Rs 6423 Cr by Fy 2020-21. Softbank backed cab aggregator is currently posting a net operating loss after tax of Rs. 2781 Cr in FY 2016-17.
In October, the ride-sharing startup confirmed $1.1 Bn investment from Tencent Holdings Limited, in exchange of 9.75% stake to loosen the grip from Softbank authority. Ola also revealed that it was in advanced talks with other investors to close an additional $1Bn as part of the same financing round, taking the total fundraise to over $2 Bn.
Uber itself is currently in the process of raising a staggering $10 Bn from Softbank and a clutch of other investor, fuelling rumours of a merger with Olain India. After acquiring Tiger Global’s stake, Softbank will now own around one-third of Ola.
Ola to invest in its own Fleet vehicle
Ola’s wholly-owned cab leasing subsidiary, Ola Fleet Technologies, has reportedly procured a term loan of Rs. 1,000 Cr from India’s fifth largest private-sector bank, YES Bank. This comes less than two months after cab booking company Ola invested Rs.100 Cr into Ola Fleet Technologies in January 2015. Meanwhile, it even acquired Gurugram-based radio taxi service GCabs.
Ola ties with Microsoft.
Ola announced on its website that it is partnering with Microsoft to build a new connected vehicle platform for car manufacturers across the globe. Ola, which is using AWS service, will switch over to Microsoft Azure to power its Ola Play features.
Customers also will be able to use productivity tools such as Office 365 and Skype for Business, as well as voice-assisted Crotona built using Microsoft Cognitive Services and Bot framework in-car, while enjoying the ride.
Tata Nano EV
After partnering with Indian Oil Corporation to launch India’s first electric vehicle charging station in Nagpur earlier this week, Ola is looking to forge an alliance with Tata Motors to launch an EV version of Nano even as Tata is planning to revamp its cheapest car as Electric Car in an attempt to attract customers again.
In recent year, there has been a 37.5% rise in the sale of EVs in India. The market for electric vehicles is growing rapidly in India, thanks to the government’s efforts to make India an all-electric nation by 2030.
These many collaborations, investments will certainly propel Ola to become the undisputed king in Cab aggregator market. Future for Ola and the Indian start-up industry altogether looks promising and bright.
Will Ola go on to become the Undisputed King in Cab Aggregation Market? Do Share your thoughts in our comment section below. Subscribe with us to get your dose of interesting news, research & opinions in the startup segment. Fill the form below: