Ride hailing service Ola is in discussions to raise $100 million fresh funding round led by RNT Capital Advisers, a venture fund set up by Tata Sons chairman emeritus Ratan Tata, according to a report in The Economic Times quoting sources.
As per the news report, through its $60 million investment RNT Capital will lead the round, while the remaining amount is likely to come in from existing based investor, US-based hedge fund Falcon Edge Capital.
Structured as an evergreen fund with an indefinite life, RNT Capital has University of California Investments (UC Investments) as its largest limited partner. Last year RNT Capital set up a $250-million corpus with UC Investments to invest in Indian companies.
Ratan Tata, who is now one of the most prolific angel investors in the company, had made an investment of about Rs 1 crore in Ola’s parent company ANI Technologies in 2015.
If the deal goes through then the Ola, which is facing aggressive competition in from US-based Uber, is likely to be valued at $3.5 billion, which is lower than its peak valuation of $5 billion at which it raised funds in 2015. However, the report said that it is a little higher than the $3 billion valuation it got when it raised capital from Softbank in November last year.
The news report further said that Ola was also negotiating further funding of $200 million from other investors. Ola has, so far, raised about $1.5 billion in funding.
While Ola continues to be the market leader, it has been under tremendous pressure from it US-based rival Uber Technologies, which has been pumping money in the Indian market, to get larger share in the market that is currently dominated by Ola. In July 2015, Uber had pledged to pump in $1 billion into India.
Recently, Japan’s SoftBank Group, has reported a valuation loss of 39.3 billion yen ($351 million) in two of its biggest bets in the country, cab-hailing firm Ola and e-commerce marketplace Snapdeal.