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Ola raises $400 mn from Tencent, Ratan Tata’s UC-RNT Fund

04 October, 2017

Chinese Internet giant Tencent has led a $400 million (Rs 2,620 crore) capital infusion in cab-hailing firm Ola as part of an ongoing funding round, a person directly familiar with the development told VCCircle.

The round also saw participation from existing investor UC-RNT Fund, a joint venture between Tata Sons Ltd chairman emeritus Ratan Tata’s RNT Associates and the University of California, the person said, asking not to be named.

UC-RNT Fund had earlier participated in a Rs 670 crore ($104.4 million) round that Ola raised in May. It had invested Rs 267.9 crore then, Ola’s filings with the Registrar of Companies showed.

The person also said that the round valued Ola, operated by ANI Technologies Pvt. Ltd, at $3 billion pre-money and that this was little changed from the previous round.

Pre-money valuation refers to a company’s valuation before it receives funding. In this case, if Ola’s pre-money valuation is indeed $3 billion, the $400 million funding round would peg its post-money valuation at $3.4 billion.

This is the same level after a mutual fund managed by US-based investment firm Vanguard Group marked up Ola’s valuation recently by 14.6% to $3.4 billion. Media reports in February had pegged its valuation around $3.5 billion. However, it is far lower than Ola’s peak valuation of $4.8 billion in August 2015.

The development comes amid reports of a $2 billion round that Ola has reportedly raised from Japan’s SoftBank Group Corp, Tencent and others.

On Tuesday, The Economic Times had reported that Ola had raised $400 million from Tencent at a valuation of $3.8 billion. According to the report, Ola was likely to allocate a significant part of this funding towards Ola Electric Mobility Pvt. Ltd, its subsidiary focussing on the electric vehicle segment.

The new funding round will give Ola fresh ammunition to take on its main rival—US-based Uber Technologies Inc. The latest fund infusion takes Ola’s total fundraising thus far to $1.93 billion. Since November last year, it has managed to mop up $800 million.

Ola has yet to file regulatory disclosures with the Registrar of Companies about the latest fundraise from Tencent and UC-RNT Fund. Its previous filings show that the company’s board had passed a resolution on 30 August to raise $400 million by issuing over 19 lakh preferential shares at Rs 13,521 each.

Subsequently, Ola had increased its authorised share capital from Rs 5,587.85 crore to Rs 5,590 crore.

The subscription price is the same at which it raised funding from New York-based hedge fund Tekne Capital
Management in August as well as from UC-RNT and Falcon Edge Capital. However, it is higher than the Rs 12,905 at which it raised $250 million from SoftBank in November last year.

SoftBank is Ola’s largest investor and has ramped up its India investments substantially this year. Apart from Ola, SoftBank this year invested about $2.4 billion in e-commerce firm Flipkart and $1.4 billion in Paytm.

Tencent, too, is expanding its India bets. This would be its first investment in Ola, though it has previously backed several Indian startups such as mobile messaging app Hike.

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Ola raises $400 mn from Tencent, Ratan Tata’s UC-RNT Fund

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