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Ola may raise $100 mn from Ratan Tata’s RNT Capital, Falcon Edge

By Dearton Thomas Hector

  • 03 Apr 2017
Ola may raise $100 mn from Ratan Tata’s RNT Capital, Falcon Edge
Credit: Reuters

Bangalore-based ANI Technologies Pvt. Ltd, which runs cab-hailing app Ola, is in talks to raise fresh funding of Rs 650 crore (about $100 million) led by RNT Capital Advisers, a venture investment platform floated by Tata Sons chairman emeritus Ratan Tata.

Existing investor Falcon Edge Capital will also invest in the round, a financial daily reported on Monday.

RNT Capital will most likely make the investment from UC-RNT Fund, a joint venture between Tata and University of California Investments. The fund made its first investment in digital media company YourStory in February.

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Tata had invested an undisclosed amount in Ola in 2015 in his personal capacity.

If the deal goes through, The Economic Times report added, Ola’s valuation will rise to $3.5 billion from $3 billion last year. That could be good news for the taxi-hailing company which saw a down round last year.

An email sent to an Ola spokesperson didn't elicit a response till the publishing of this report.

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Of late, things have been rather rocky at Ola and its US-based rival Uber as they face a serious backlash from their driver-partners. The drivers have been going on strike in different cities across India, protesting against falling incentives and dwindling incomes.

In February, there were media reports that Ola had raised $330 million in a funding round led by Japan’s SoftBank.

In October last year, The Times of India had reported that Ola had held talks with SoftBank and US-based automobile giant General Motors to raise $500 million.

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Founded by Indian entrepreneurs Bhavish Aggarwal and Ankit Bhati in 2010, Ola has so far raised close to $1.3 billion from marquee investors such as Tiger Global Management and Matrix Partners, and is locked in an intense battle with global rival Uber Technologies Inc. Both the companies are burning a huge amount of cash to woo customers and need to refill their coffers constantly.

Valued at $5 billion, Ola posted a seven-fold rise in revenue from operations to $57.6 million (Rs 380.2 crore) for the year ended March 2015 from $7.5 million (Rs 49.6 crore) in FY14. But total expenditure rose 14 times to $177.7 million (Rs 1,173 crore), largely due to a 19-fold jump in the company’s fleet operator costs to $137.1 million (Rs 905 crore). This widened its net loss to $114.4 million (Rs 754.8 crore) from $5.2 million (Rs 34.2 crore) in the previous year.

It secured $500 million in a Series F round from Scottish investment firm Baillie Gifford and China’s Didi Kuaidi. Falcon Edge Capital, Tiger Global, SoftBank, and DST Global also participated in the round.

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In April 2015, Ola raised $400 million in a Series E round led by DST Global. In October 2014, it mobilised $210 million from investors led by SoftBank as part of its Series D round.

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