Ola hives off financial services business into separate entity: Report

Ola co-founder and CEO Bhavish Aggarwal. Photo: Mint

Indian ride-hailing giant Ola has hived off its financial services business from the parent company, ANI Technologies, to take on other biggies in the digital payments space, including Paytm, PhonePe, AmazonPay and Google Pay.

According to a report in The Economic Times, Ola is looking to raise capital separately for the independent entity. The move, which has found support from the board, is a part of the company’s strategy to “aggressively diversify beyond its core ride-hailing business”.

Some of the service offerings by its financial services business, Ola Money, include short-term credit, mobile wallet, insurance and utility bill payments. Ola Money Postpaid has emerged as a significant product in the fintech space and is already a profitable business, the report said quoting a source.

“The (Ola Financial Services) business alone is on the path to being IPO-ready in the next three-four years,” the report said quoting an investor.

Earlier this year, Ola had also applied for a non-banking financial company (NBFC) licence to offer credit directly from the company’s books. The company has also struck partnerships with Religare for health insurance, Zipcash for the wallet business, and SBI for credit cards.

As unicorns scale and grow bigger, they feel the need for ramping up team, and also spinning off businesses for greater flexibility, and an efficient management of resources and operations.

According to another report by The Economic Times last month, Walmart is also planning to demerge PhonePe from Flipkart so that the US-based retail giant will entirely hold its ownership, and grab a larger share of the booming Indian digital payments market.
The payments space is currently dominated by SoftBank- and Ant Financial-backed Paytm, but the competition in the space has heated up with the entry of Amazon Pay and Google Pay.

Paytm Mall also reportedly has decided to separate all functions from its holding company One97 Communications, which is also the parent of Paytm. In July, eBay picked up a 5.5% stake in Paytm Mall for $160 million.

Ola, which counts SoftBank among its large investors, was founded in 2011 by Bhavish Aggarwal and Ankit Bhati as a cab-hailing service. Ola launched its fintech service Ola Money in 2015. In December 2017, the Indian unicorn entered the food delivery space with the acquisition of FoodPanda’s India operations.

Earlier this year, the company also spun off its electrical vehicle unit, Ola Electric Mobility Pvt Ltd, to get deeper into the electric vehicles (EVs) space. The company focuses on areas including charging solutions, EV batteries and developing viable infrastructure that allows commercial EVs to operate at scale.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.