Ola raises $36 mn from New York-based hedge fund

Credit: Shah Junaid/VCCircle

ANI Technologies Pvt. Ltd, which operates homegrown cab-hailing firm Ola, has raised $36 million (Rs 231 crore) from New York-based hedge fund Tekne Capital Management, filings with the Registrar of Companies show.

VCCircle reported earlier this month that Ola was set to raise $36 million from existing investors through a board resolution passed on May 29.

Delaware-based Tekne Private Ventures III, LP invested Rs 167.15 crore while Tekne Private Ventures 1 Master, a Cayman Islands-based fund, put in the rest, the filings show.

The company allocated the shares at Rs 13,521 apiece, the same price at which it recently raised $104.4 million from Falcon Edge Capital and Ratan Tata’s RNT Capital Advisers. This price is higher than the one at which it raised $250 million from Japan’s SoftBank Group Corp, its largest investor, in April.

It is not clear whether this is part of a larger round or if more investors are involved. In June, Ola had raised $50 million from Tekne and was in talks with several investors, including Coatue Management LLC, to raise more funds.

E-mail queries have been sent to Ola in this regard.

Ola’s valuation could not be ascertained. In August 2015, it was valued at $4.8 billion. Media reports in February pegged its valuation around $3.5 billion. A mutual fund managed by US-based investment firm Vanguard Group recently marked up Ola’s valuation by 14.6% to $3.4 billion.

Ola continues to mop up funds to keep its deep-pocketed rival Uber at bay. Earlier this month, Mint reported that Microsoft was likely to invest $50-100 million (Rs 320-640 crore) in Ola in a deal that might also see the taxi-hailing firm switch to Microsoft’s cloud computing platform Azure from Amazon Web Services.

In their bid to capture India’s lucrative cab-hailing market, Ola and Uber have been splurging huge amounts of cash. For Uber, India is prized ground, particularly after it lost out to Didi Chuxing in China and more recently to Yandex in Russia, two markets characterised by highly protectionist business regimes. In fact, the taxi-hailing company has committed to India the chunk of the $3.5 billion it secured from Saudi Arabia’s Public Investment Fund last year.

However, Ola seems to be in no mood to relent as it has been busy rolling out local innovations suited for the Indian market. Earlier this month, VCCircle reported that it was attempting to launch its bike taxi service, Ola Bike, in Kolkata and has already initiated talks with local bike taxi players.

A sharp focus on profitability, reduction in driver incentives, and consequently, driver strikes across the country put brakes on the growth of cab-aggregators Ola and Uber in the first quarter of the calendar year 2017, thereby improving unit economics.

In 2015-16, Ola’s consolidated net loss tripled to Rs 2,311.7 crore as total expenditure surged to Rs 3,078.19 crore from Rs 899.7 crore the year before. Its operating revenue jumped to Rs 438.6 crore from Rs 57.5 crore.

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