Ride-hailing company Ola has raised $300 million (Rs 2,050 crore) from South Korean automakers Hyundai Motor Co and Kia Motors Corp, as it diversifies its investor base and boosts its war chest to compete with main rival Uber Technologies Inc.
The three companies will collaborate to develop fleet and mobility solutions as well as build India-specific electric vehicles and infrastructure, Hyundai said in a statement.
The deal is part of Hyundai’s efforts to expand operations beyond automobile manufacturing and sales to total fleet solutions. The collaboration will enable Hyundai to engage across the entire mobility value chain including vehicle production, fleet operation and mobility services.
As part of the deal, Ola and Hyundai will co-create solutions to operate and manage fleet vehicles to offer Ola drivers a range of financial services, including lease and instalment payments besides vehicle maintenance and repair services.
“India is the centerpiece of Hyundai Motor Group’s strategy to gain leadership in the global mobility market and our partnership with Ola will certainly accelerate our efforts to transform into a smart mobility solutions provider,” said Euisun Chung, executive vice chairman of Hyundai Motor Group.
Bhavish Aggarwal, co-founder and CEO of Ola, said Hyundai's investment will help the ride-hailing company bring to market "a new generation of mobility solutions" as it expands its range of offerings.
Hyundai, the second-largest carmaker in India after Maruti Suzuki India Ltd, joins global automakers such as Japan's Toyota Motor and US-based General Motors in investing in ride-hailing companies. Toyota has invested in Uber while GM has backed Uber rival Lyft. US-based Ford Motor Co. and India’s Mahindra & Mahindra Ltd invested in Indian self-drive car rental company Zoomcar in February last year. Hyundai invested in Indian self-drive car rental startup Revv in August last year.
Hyundai and its affiliate Kia had also previously invested $275 million in Singapore-based ride-hailing firm Grab last year. However, the deal with Ola, operated by Bengaluru-based ANI Technologies Pvt. Ltd, is the biggest combined investment by Hyundai and Kia.
Ola's other investors include Japanese internet conglomerate SoftBank Group Corp and China's Tencent Holdings Ltd. The company is raising funding from a bunch of new and existing investors as part of measures to diversify its shareholding base and reduce its reliance on SoftBank, which also owns a stake in Uber.
Just last month, Ola raised Rs 112 crore ($15.6 million) from a clutch of new foreign investors including Raymond S Cahnman, chairman of trading firm the TransMarket Group; New York-based philanthropists Tina and Steven Price; J3T Ventures; and investment firm Lyon Assets.
Earlier this month, Ola’s electric mobility arm raised Rs 400 crore from some of the ride-hailing unicorn’s existing investors including New York-based hedge fund Tiger Global Management and venture capital firm Matrix Partners India.