SoftBank-backed Indian ride-hailing major Ola is in the middle of a restructuring process ahead of its proposed initial public offering (IPO), which will see it downsize the overall staff strength by 5-8 per cent, confirmed a company’s spokesperson.
The company is eyeing a listing in the next 18-24 months, which could see some of its key investors including, SoftBank Group Corp, Tiger Global, and Steadview Capital partially exit their shareholdings in the company.
SoftBank, alone, owns about 28 per cent stake in the company.
Ola, which is on its path to profitability, will also accommodate some of its employees in other business units like food, electric and financial services as part of the restructuring, the spokesperson said. The company recently 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.
“Over the past couple of years, Ola has grown its core mobility business and introduced new business verticals such as financial services, food, public transport technology and electric mobility. To enable our rapid growth, we have continued to evolve every aspect of our operational philosophy at periodic intervals,” the spokesperson said.
“With a view to become more nimble and have a sharper focus on growth and profitability, we are redesigning the organisation to build a structure that strengthens and leverages our local and global scale and enables faster decision making across all of Ola’s group companies.”
DealStreetAsia also has a copy of an internal email by Harish Abhichandani, Ola Group chief financial officer, to the company’s employees, which read: “As a business, we need to exercise sharper focus on metrics like revenue, growth, and profitability. We also need to refresh the way we run our daily operations – processes, people, productivity, etc…As part of this redesign, it is imperative to right-size an bring efficiencies in our core mobility business and leverage our talent base across all our business verticals….We will continue to focus on measuring productivity metrics or consolidating some functions…”
Founded in 2011 by Bhavish Aggarwal and Ankit Bhati, Ola has been inching towards profitability. ANI Technologies’ (which runs Ola) standalone losses came down to Rs 1,160.27 crore in FY19 from Rs2,676.70 crore in the last financial year. Total income rose 16 per cent to Rs2,155.21 crore in FY19 from Rs1,860.61 crore in the previous fiscal.
Ola is locked in a fierce battle with American ride-hailing giant Uber to grab a larger share of the Indian ride-hailing industry. Both the companies are also now looking beyond cab-hailing businesses to grow.
Ola is betting big on electric mobility for two-wheeler and three-wheeler segments. A year ago, the Indian company announced an investment of about $100 million in scooter-sharing startup Vogo. It’s also looking at aggressively growing its financial services business.
Meanwhile, Uber plans to launch Uber Money in India in the next 6-8 months. It is looking at ways to ramp up its food delivery business in India.
Ola was valued at roughly $5.7 billion when it raised $74 million in funding from Steadview Capital in January this year. Since its launch in 2011, Ola has raised over $3.8 billion in primary capital from a number of local and global investors.