After witnessing a fall in rides owing to driver strikes due to the cutback of incentives, Bangalore-Based cab aggregator Ola, has raised a fresh round of funding of $104.4 million. The investment round was led by Falcon Edge Capital and RNT Capital Advisers, a joint venture between Tata and University of California Investments.
The news of a possible funding came about last month when Ola received board approval to raise about $100 million. According to Ola’s filings with the Registrar of Companies, US-based hedge fund Falcon Edge invested about $62 million while UC-RNT Fund put in about $42 million.
The home-grown cab aggregator has issued 495,526 shares at $210.79 per share. The shares issued are fully and compulsorily convertible, cumulative preference shares. However, this is higher than the $201.18 price at which it recently allotted shares to its largest stakeholder SoftBank to raise $260 million last month.
The fresh funding comes right after recent filings with the US Securities and Exchange Commission, after which US-based Vanguard Group marked up the value of its investment in ANI Technologies, Ola’s parent company, to $187.5 per share as on February 28, 2017. Although Ola’s current valuation cannot be ascertained now, it can be assured that it is an upward graph as against the steep downfall of $5 billion in November 2015 to the latest estimation of $3.5 billion.
“Snitches get stitches”
Currently, both ride-hailing players are trying hard to strike the right balance between pursuing growth and seeking profitability. To fight off stiff competition from US-Based rival Uber, Ola is trying to pound the pavement with Ola Fleet, its leasing subsidiary, to increase the supply of cars and woo drivers with a new business model.
On the other hand, Uber has started a car leasing program in partnership with Mumbai-based Xchange Leasing. Additionally, with other services like Uber for Business (U4B) and the recent launch of UberEATS in India, looks like Uber is betting high on reaping profits through diversification.