Ola confirms the $400M funding round, to expand to 200 cities by year end

2015 Q1 saw over $1.7 billion funding in Indian startup ecosystem and the second quarter seems to carry the momentum forward. Within six months of raising $210 million in series D round of funding, Ola (formerly Olacabs), today announced its Series E round of funding of $400M. This investment round is led by DST Global with participation from GIC, Falcon Edge Capital and existing investors. This takes the total funds raised by the company to over $675M. This round is also set to raise the company's $2 billion valuation by a good amount.

Ola has expanded to 100 cities in the current year from 10 cities a year ago, across cabs, taxis and auto-rickshaws. This growth has been further accelerated with the acquisition of TaxiForSure, in March 2015. Ola has also launched an on-demand platform for instant food delivery, OlaCafé, currently available in beta across four cities.

Related read: VC-backed Indian entrepreneurs start shopping for growth – M&A activity increases

Joining the leagues of startups partnering in the current edition of Indian Premier League, Ola has announced that it is the ‘Official Travel Partner’ for five of the IPL 2015 teams Chennai Super Kings, Rajasthan Royals, Sunrisers Hyderabad, Mumbai Indians and Kings XI Punjab.

Where will the money go?

1. The additional investment will allow Ola to go deeper into smaller cities to build personal transportation for consumers.

2. Ola also plans to help drivers from these small towns turn entrepreneurs, creating lasting social and economic impact for them.

3. The company will continue to invest in technology to suit the needs of drivers and customers as well as invest in the driver ecosystem.

4. Ola aims to further localize its offerings and plans to be in 200 cities by the end of this year.

Through ‘Ola Pragati’ in partnership with the State Bank of India, drivers can now avail of a daily loan repayment facility and a lower down payment to buy a car of their choice. Ola aims to offer this program to over 100,000 driver entrepreneurs across India within the next 2 years.

Investor and investee speak

Bhavish Aggarwal, co–founder and CEO of Ola said,

Our vision is that people shouldn’t find the need to own a car. And we have been able to make this possible for millions of customers in the past four years and creating over a hundred thousand driver entrepreneurs on the platform.

Rahul Mehta, Managing Partner, DST Global said that they are excited by Ola's impressive growth and the potential to expand the platform into other categories. Avnish Bajaj, co-founder and Managing Director, Matrix India believes that he has witnessed execution to Ola founders' grand vision and scale, and this investment by DST Global, GIC and Falcon Edge, supported by existing investors, sets the company up for future growth. He referred to Ola's journey as phenomenal and unique occurrence in the lifecycle of investment firms.

Ola has raised earlier rounds of funding from Tiger Global, Matrix Partners India, Steadview Capital and Sequoia Capital.

Last six months

Apr 2015: Ola announces to train 50000 women drivers in next 3 years

Mar 2015: Acquisition of TaxiForSure

Mar 2015: Ola launches Olacafe, an on-demand food delivery service in four cities

Oct 2014: Ola reaches billion dollar valuation

Oct 2014: Ola raises $210 million series D funding

Related watch: How Ola was made