India’s Ola raises $225m from Falcon Edge Capital, existing investors

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Ola, India’s third most valuable Internet company, has raised around $225 million (Rs.1,478 crore) as part of a new funding round that could see the firm raise over $500 million, and is expected to be closed shortly.

The latest funding is led by existing investor Falcon Edge Capital. The New York-based hedge fund is joined in the latest round by Ola’s other existing investors Tiger Global Management LLC and Softbank Corp. and six other investors, according to documents filed by the company with the Registrar of Companies (RoC).

The fresh tranche takes the total capital raised by ANI Technologies Pvt. Ltd, the Mumbai-based company that owns Ola, to a little over $900 million.

The round also comes less than six months after Ola closed a $400 million round from an investor consortium led by Russian billionaire Yuri Milner’s investment firm DST Global. Then, Ola was reportedly valued at $2.5 billion.

Shortly after the $400-million round, Mint reported that Ola was in the market to raise $500 million more. The latest round is likely to be part of that round, though this could not be verified. Ola CEO and founder Bhavish Aggarwal did not respond to emailed queries.

According to the RoC filing, dated 8 September, Falcon Edge, investing via an entity called FO Mauritius I Ltd, has written out a cheque for Rs.514.7 crore. Other major investors in the “Series H” round are Tiger Global, investing via Internet Fund III Pte Limited, and Softbank, which has invested through SIMI Pacific Pte Limited. Tiger and Softbank have pumped in Rs.396.9 crore and Rs.384 crore, respectively.

Email queries to Falcon Edge, Softbank and Tiger Global remained unanswered.

Other existing investors, Steadview Capital, the Hong Kong-based hedge fund, Pittsburgh based technology firm ABG Capital and Mauritius-registered FII LTR Focus Fund have contributed Rs.21.2 crore, Rs.17.6 crore and Rs.12.3 crore respectively. New investors in the round include JS Capital (M) Ltd and Parkwood Bespin, both Mauritius-registered entities, and Singapore-based high net-worth individual Daniel E. Neary. The three together contributed Rs.131.2 crore.

According to the firm’s ROC filings, Ola has issued shares at a price of Rs.29.4 lakh apiece. This is almost double the value of shares allotted to Tata Group chairman emeritus Ratan Tata and former Vodafone Plc CEO Arun Sarin in May and August, respectively. Tata and Sarin invested in Ola as part of the extended $400 million Series G round and picked up stakes at Rs.15.8 lakh per share.

As per a valuation document filed with the RoC in April, Ola and its investors expect the firm to become PBT (Profit Before Tax) positive by 2017-18.

The latest fund raising comes barely a month after San Francisco-based Uber, currently the world’s most valuable start-up at $51 billion, announced that it would pump $1 billion into India over the next 6-9 months. Uber claims to be growing 40% month-on-month in India and expects to clock more than one million daily rides by the end of the current fiscal. It has introduced certain India-specific measures to suit its business to the local market. These include cash payments and low cost services.

Also, last month, Tata Opportunities Fund invested almost $100 million in Uber, to help in its India expansion.

Over the past few months, Ola has also unveiled a slew of measures to take on Uber. Its latest game plan includes becoming a one-stop transportation solutions provider. After cabs and autorickshaws, the firm is on the verge of rolling out shuttle bus services by on-boarding chartered and tourist buses on its platform. In addition, it is exploring ancillary revenue channels. It entered the food delivery business with Ola Café in March and followed with grocery delivery app Ola Store in June. It is also expanding its mobile wallet, Ola Money, by offering it to other ecommerce platforms such as OYO Rooms, Lenskart and Saavn.

Sayan Chakraborty contributed to this story.

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