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.
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.