The move comes at a time when the valuation of the company saw a steep downfall of $5 billion in November 2015 to a current estimation of $3.5 billion. However, in a recent report by Zirra, Ola was valued at $4.4 billion, as against WSJ which marked the company at $5 billion. Ola has been reportedly looking to raise funds for the last six months, and now had to settle for a lower valuation to seek this funding.
Since its inception, Ola has reportedly received $1.2 billion in funding from a range of investors like Tiger Global Management, DST Global, Accel Partners and Sequoia Capital. This includes Softbank’s investment of $500 million in November 2015, given the fact that it holds 22.5 percent stake in Ola. However, in November 2016, Softbank reported losses of about $555 million from operations in Ola as well as Snapdeal, an e-commerce company, which is now laying off hundreds of employees in a cost-cutting exercise.
Ola’s arch-rival Uber is also not close to profitability, but after ceding the Chinese market in exchange of 20% of Didi Chuxing’s shares, it has stopped bleeding cash. The company is still investing hundreds of millions of dollars in its Indian subsidiary to compete with the local rival in the $10 billion market.
On the other hand, the Chinese ride-hailing app, Didi Chuxing is valued at $32 billion by Zirra’s algorithms, a number that expresses Didi’s victory in China. Didi also announced a strategic investment in Brazilian ride-hailing startup 99, making South America its first territory outside of China. That put Didi in a direct conflict with Uber, which is now a stake holder in Didi.
