Ola raises $350M in fresh funding at lower valuation of $3.5B
Amid much speculation over its functioning and growth, media reports suggest that cab aggregator Ola has finally received a new lease of life in the form of fresh funding. The company has raised $350 million from existing and new investors. It had last raised $57 million from Vanguard Mutual Funds in December 2015.
Ola has so far raised $1.23 billion, and at its peak was valued at $5 billion. Recently, the company was devalued by Vanguard to $3.5 billion. Ola’s investors include – Softbank, Tiger Global, Sequoia Capital and Matrix Partners.
Recently, Ola’s investor Softbank wrote $475 million off Ola and Snapdeal. In a filing early this month, Softbank reported it saw a loss of ¥39,281 million in terms of change in the value of its investments in India. This loss is despite foreign exchange gains of ¥16,133 million.
Last November, Softbank had also reported a significant loss of ¥58,140 million through the devaluation of its shareholding in Snapdeal and Ola. Excluding losses/gains from currency fluctuations in the value of Softbank’s shareholding, “the investor marked down the combined value of its shares in Ola and Snapdeal by ¥26,896 million ($230 million) in the three months that ended December 31,” Business Standard reported.
The company’s filing also said that gain or loss arising from financial instruments at FVTPL (fair value through profit or loss) consists mainly of changes in fair value of preferred stock investment, including embedded derivatives, such as ANI Technologies Pvt Ltd (Ola) and Jasper Infotech Private Limited in India (Snapdeal), designated as financial assets at FVTPL.
This year hasn't been great for Ola, all around. There has been mounting pressure from both the government and driver partners. Driver partners in Delhi and Bengaluru are protesting for better incentives and fares. Then there is the ban on Ola Share and uberPOOL (for Uber) by the Government of Karnataka that needs to be tackled. Currently, the aggregators and the government are on a cease-fire.
This is not the first time the cab aggregators have been caught in a jam. Since their launch, there have been regular run-ins with the Karnataka government. However, they are not the only ones to have been accused of ‘traffic violations’. Shuttle bus aggregator ZipGo had to shut down in 2015 after facing a similar situation.