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Ola ends Series-J ride with Rs 520 crore from Steadview

, ET Bureau|
Jan 11, 2019, 08.11 AM IST
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olacabsBCCL
Ola has already ensured funding from Flipkart cofounder Sachin Bansal and existing backer SteadviewCapital. These infusions will total up to $200-250 million.
NEW DELHI: Hong Kong-based Steadview Capital has invested over Rs 520 crore (about $74 million) in Ola as part of an ongoing financing round that values the ride-hailing company between $5.5 billion and $6 billion. This would make Ola the third-most valued Indian private internet company after Flipkart ($22 billion) and Paytm ($15-16 billion), going past OYO, valued at $5 billion.

As part of the Series-J transaction, Ola’s existing investor Steadview Capital has received 2,45,082 preference shares at a subscription price of Rs 21,250 per share, according to documents filed with the Registrar of Companies, which were accessed by business signals provider Paper.vc. Steadview Capital had last participated in Ola’s 2015 fundraise.

ET was the first to report in its edition dated October 31 that Ravi-Mehta-led hedge fund Steadview Capital is finalising an investment in Ola. This is the second time this month that Ola has raised funds through issuance of preference shares. Earlier, it had secured Rs 14crore through this route from China’s Eternal Yield International.

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Ola’s founder Bhavish Aggarwal has reportedly been looking to bring in fresh investors, including Temasek — the investment firm backed by the government of Singapore — a move industry executives said is an effort to contain the influence of SoftBank, its largest institutional stakeholder.

This is also the latest investment by Steadview Capital, which was on a deal-making spree in 2018, after having been relatively dormant since 2015. The last few months have seen the investment firm rack up its India-specific portfolio, investing in INDWealth, UrbanClap and Urban Ladder.

Separately, last month, ET, citing industry executives, had reported that SoftBank had offered to invest as much as $1 billion in a new financing round for Ola, as the Indian rival of Uber plans to aggressively grow its food-delivery business.

Further, the taxi aggregator may invest in areas such as epharmacy. It’s not clear whether Ola’s cofounder Aggarwal will accept more capital from SoftBank and allow the investor to ratchet up its shareholding from about 26% at present. However, he may consider a smaller amount from the Japanese investor, sources had told ET earlier.

SoftBank’s proposal to back Ola with such a huge sum is significant because it comes after the most influential tech investor had attempted to buy additional stake in the company from Tiger Global in 2017. These discussions had happened without Aggarwal’s consent, as was reported earlier. Since then, Ola’s founders have altered their rights to safeguard the company from a possible sale or merger.

While Aggarwal has been shoring up his rights against SoftBank and adding allies to the company board since last year, there are signs of a thaw in their relationship.

Ola has already ensured funding from Flipkart cofounder Sachin Bansal and existing backer SteadviewCapital. These infusions will total up to $200-250 million. Singapore’s sovereign wealth fund Temasek is also likely to infuse primary capital in the company as part of the ongoing financing round.

Additionally, India’s ride-hailing space has been witnessing a slowdown. ET had reported in its September 24 edition, that Ola and Uber, while increasing their absolute number of daily rides, saw growth decline to 20% on average in 2018 to 3.5 million rides across all segments, including taxis, autorickshaws, and shared cabs. That compares with 57% growth to 2.8 million rides a day in 2017 and 90% to 1.9 million in 2016. The data pertains to Ola and Uber.
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