New Delhi:
In a bid to counter increasingly aggressive competition from rival Uber, India's largest ride-hailing startup, Ola, is set to raise about $600 million and may close the deal by year end, according to a close source familiar with the matter.
As per reports in a leading financial journal, the funds are coming from new and existing investors and would give six-year-old Ola enough capital for at least 18 months, said the person, asking not to be named because the talks are private.
Ola, backed by SoftBank and Tiger Global Management, could use the funds to speed up its spending on recruiting drivers and helping them lease vehicles. It would also allow Ola to expand geographically as it tries to maintain its lead over Uber, which says India is now a "strategic priority," and has increased investments in the country after agreeing to sell its money-losing China operation.
"Funding is critical for Ola to keep its momentum and maintain its market leadership in the $10 billion ride-hailing market, which is readying for its next phase of expansion," said Jaspal Singh, a partner at Delhi-based transportation consultancy, Valoriser Consultants. "Uber has even deeper pockets now that it is out of China, which was a big drain on its resources, and it will now focus on India in a big way," he said.
