Published: Wed, October 11, 2017
Business | By Max Garcia

Ola raises $1.1 billion in fresh funding from Tencent, Softbank

Ola raises $1.1 billion in fresh funding from Tencent, Softbank

Ride-hailing app Ola today said it has raised Dollars 1.1 billion in a new round of funding from China's Tencent Holdings Ltd and SoftBank Group, bolstering its war chest to compete against US-based rival Uber.

With the latest round of funding, Ola plans to make strategic investments in its supply chain and technology, while also making significant investments into technologies such as artificial intelligence and machine learning. Existing shareholder Softbank and a few other US-based investors also participated in this round.

ANI Technologies, which operates Ola, counts among its investors names like SoftBank Group, Tiger Global, Sequoia India and Accel Partners US.

The company offers free Wi-Fi in many of its vehicles, and about a year ago, it introduced a premium subscription service for about $8 a month that gives frequent riders special benefits such as priority booking and an escape from surge pricing during times of peak demand.

This is also Ola's first major fund raising after it raised $500 million from investors in November 2015. The transportation and mobility industries are seeing huge changes globally.

However, Ola suffered a consolidated loss of over Rs 2,311 crore - about Rs 6 crore a day - during that fiscal on account of heavy advertising, promotional expenses and other costs.

Tencent President Martin Lau said as Ola's offerings were tailored to meet the country's transportation needs, the partnership would enable his firm to be part of the growing ride-hailing space.

India's ridesharing leader Ola announced today it has raised $1.1 billion in a round led by Tencent and SoftBank as the company seeks to put more distance between itself and Silicon Valley's Uber. Flipkart leads the charts, having raised at least $2.8 billion in two separate tranches from SoftBank, Tencent, eBay and Microsoft, while Paytm raised $1.4 billion from SoftBank earlier this year.

The antitrust cases in India, nevertheless, are set to further intensify the showdown between ride-hailing firms and local players in India's $12 billion taxi market.

Tencent is also aggressively investing in the country to cash in on the burgeoning Indian internet market. Ola will also invest in increasing its fleet of vehicles and presence in Indian cities, where it is already not present.

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