Confirming what the rumour mills had been churning out for quite some time now, Ola has today confirmed that it has acquired Bangalore-head quartered app-based radio-cab startup, TaxiForSure for a staggering $200 Million. The deal has been finalised in both cash and equity.
Under the terms of the deal, Ola and TaxiForSure will continue to operate as separate entities. The leadership and all of the 1700 employees shall continue to work with TaxiForSure, with Arvind Singhal (currently COO) being appointed the CEO. Aprameya Radhakrishna and Raghunandan G, the founders of TaxiForSure, will contribute in an “advisory role” for “a certain period“. TaxiForSure is currently in 47 cities with over 15,000 vehicles registered on its platform.
The acquisition however isn’t surprising, considering that an Economic Times report had already cited unidentified sources confirming the acquisition. However, deal’s amount hadn’t been disclosed at that point of time.
The acquisition holds valiue for both Ola as well as TaxiForSure. Ola is currently battling it out with a cash-rich-rich and aggressively expanding Uber, which recently saw its valuation jump to a staggering $41 Billion, way-ahead of other established start-ups in tech-ecosystem.
Though Ola too received a good $210 Million from SoftBank last year, it is no way near to what Uber has been receiving – which includes a recent $600 Million ‘strategic investment’ by Baidu. Thus, an acquisition of rival company based out of India was on the cards, if it had to stand ground against Uber’s rising popularity.
Bhavish Aggarwal, Co-founder and CEO, Ola said,
Ola and TaxiForSure share the same vision of revolutionising urban mobility. TaxiForSure has a great team and they have built a very exciting business in a short time. There’s a lot of complementary value in the strategy TaxiForSure has followed. I’m very excited to welcome the TaxiForSure team onboard and look forward to working with them towards realising our common vision.
Acquiring TaxiForSure is a fine move, considering a completely different model of supply and distribution which the company operates with. It works with cab operators compared to Ola’s model of working with driver-entrepreneurs. TaxiForSure has also focused heavily on the economy segment of cab consumers with innovative offerings like Tata Nanos as part of their fleet and Rs 49 as base fares in the past.
For customers, drivers and operators on the TaxiForSure platform, nothing will change. Customers can continue to book a cab through the app and call centre and drivers will continue to get access to customers on TaxiForSure’s technology platform as always.
Ola has been funded by Tiger Global, Matrix Partners, Sequoia Capital, Steadview Capital and most recently, Softbank over its four rounds of fund-raising. Investors in TaxiForSure are Accel Partners, Bessemer Venture Partners and Helion Venture Partners. With this acquisition, investors in TaxiForSure will roll over their stock into Ola.