Ola undertakes major restructuring, downsizes staff ahead of its IPO

Photo: Reuters

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.

 

 

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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.