Ola has regained its number two ranking in the pecking order of India’s most valuable startups, after securing $74 million in fresh funding from existing investor Steadview Capital in its latest funding round, which valued India’s leading cab-hailing service at roughly $5.7 billion.
Ola, which has been in talks to raise at least $1 billion over the past year, moved ahead of budget hotel chain Oyo Rooms in terms of valuation and is now only behind digital payments service firm Paytm.
Last year, Ola had briefly conceded its second position to Oyo Rooms, which was valued at nearly $5 billion after it raised close to $800 million from SoftBank and other investors. Flipkart was the most-valuable Indian startup for the longest time, before it got acquired by Walmart last year.
The latest funding infusion is part of $1 billion that Ola is currently in the process of raising. Last January, Ola had raised $1.1 billion in fresh capital at a valuation of $3.5-4 billion from China’s Tencent Holdings Ltd and existing investor SoftBank and said that it was in talks to raise an additional $1 billion.
According to regulatory filings accessed through data intelligence platform Paper.vc, Steadview Capital has received 245,082 preference shares at a subscription price of Rs 21,250 per share as part of the series J round. Steadview now holds a 2.61% stake in Ola.
The latest funding comes a few months after Ola raised around $50 million at a valuation of roughly $4.3 billion from Hong Kong-based Sailing Capital and the China-Eurasian Economic Cooperation Fund (CEECF).
Ola has been fighting several battles over the last several months, the biggest one being against its largest investor SoftBank. Ola’s Bhavish Aggarwal has been looking to bring in more capital through new investors to avoid ceding control to SoftBank, which currently holds roughly 26% in the company. The Economic Times newspaper had reported in December that SoftBank had offered to invest another $1 billion into Ola.
Ola has also been shoring up its core cab-hailing business in India against arch-rival Uber Technologies Inc. As part of its plans, it is looking to aggressively expand its footprint abroad and within India, besides building a strong food-tech business to compete with sector incumbents Swiggy and Zomato. As Mint reported earlier this week, Ola is also looking to foray into the medicine delivery space through an investment in Myra Medicines.
Ola did not respond to queries sent by Mint as of press time.
Since its launch in 2011, Ola has raised over $2.5 billion in primary capital from a number of local and global investors. For Ola, it is imperative to keep a large war-chest ready to fight Uber, which has deep pockets. To stay competitive in the marketshare battle against Uber, Ola also needs to continue to attract new investors, if it wants to keep SoftBank at bay.
This article was first published on livemint.com