According to several media reports and Ola’s current RoC filing, the Bengaluru-based cab aggregator has raised $104 million funding led by Falcon Edge and Ratan Tata Fund. Earlier this year, Ola had also raised $250 million from Softbank. At its peak, Ola was valued at $5 billion. Early this year, the company was devalued at $3.5 billion.
The fresh round is believed to help Ola retain its current market share and continue its battle against the San Francisco-based cab aggregator Uber. According to RedSeer, a management consulting firm, both Ola and Uber last year had seen a four-times increase in their ride numbers as opposed to 2015.
According to Ola’s recent RoC data, the company’s losses jumped up to a whooping Rs 2,313.6 crore, in the financial year ending March 2016. But the company also saw an increase in revenue growth to Rs 758.2 crore.
In the past year, Ola has upped its battled against Uber and the 2016 losses have been attributed to spends in marketing, technologies, and salaries. All this clearly showing that Ola is ramping up its operations to take on Uber.
The company’s RoC filings reported in the Business Standard state that the ride-hailing giant spent Rs 437 crore on advertising, Rs 120 crore on technology, and Rs 381 crore on salaries. Its income from operations was at Rs 438 crore, just a crore more than what it had spent on advertising.
Over the past year, the company has been burning a lot of cash to simply maintain its lead over Uber. It was this very burning cash phenomenon that is believed to have made Softbank write $475 million off Ola and Snapdeal.
In order to ensure that Ola maintains its 65 percent market lead over Uber, it has launched Ola across different cities, has nine different categories, and has come up with differentiators like Ola Play and Ola Select to create a much-needed edge.
This year, Ola has had its share of wars with the government over Ola share, and also the driver partners have been disgruntled with the app-based cab aggregator for slashing their incentives. While Ola has had its problems, Uber has had its problems on a global scale.
From #deleteUber campaign, to sexual harassment rows, to senior management quitting, Uber has had its hands full. Now even Uber’s biggest rival Didi has also raised $5.5 billion, with a focus on a global market.
In December 2015, Ola, GrabTaxi, Lyft, and Didi Kuaidi had formed a global alliance to take on Uber in India. With it looking at a global expansion, will Didi look at investing more in the Indian market, and thus pump more money into Ola? Or will it look at a deeper partnership?