Ola, India’s leading cab hailing service provider, has raised $250 million in a new round from Japan-based SoftBank, as revealed by the documents filed with Ministry of Corporate Affairs (MCA).
However, this investment wasn’t done this year. The documents reveal that the funding deal was closed last year through SoftBank’s subsidiary SIMI Pacific Pte Ltd in Ola’s parent company ANI Technologies.
The documents further suggest that Ola has issued 12,97,945 Series-I preference shares, each with a face value of ₹10, issued at a subscription price of ₹12,905 that includes a premium of ₹12,895.
The new round of funding, led by SoftBank would also reassert its position as the major shareholder in Ola. According to estimates, SoftBank held around 22.5% stake in Ola, followed by Tiger Global at 20.5%.
The funding looks like another ‘down round’ as the company’s valuation has been lowered compared to its valuation in the previous round. Interestingly, the round has not been officially announced till date. With the down round, the company’s valuation has been dragged down from $4.8 billion to $3 billion pre-money.
The company’s post-money valuation will be determined by the exact amount of capital it finally attracts. Some reports suggest that the round is still open and the company is working on to attract investors to participate in this round.
We earlier reported that Ola is planning to raise another $100 million from Ratan Tata’s RNT Capital and Falcon Edge in a deal which could move up its valuation to $3.5 billion.
In 2016, Ola and Uber together clocked a nearly four-fold increase in the number of rides compared to the previous year, according to a report by RedSeer Management Consulting. Industry estimates place the market share for Ola at around 65% with Uber holding the second slot in the taxi aggregation business.
The Bangalore-based company has reportedly clocked about 6 million weekly rides on an average between September and December 2016, across all its offerings — cabs, auto rickshaws, and shuttle buses. However, the major source of revenues for both Ola and Uber — around 70-75% — comes from their economy services that include Ola Micro, Mini, and UberGo respectively.
The company has been burning a huge amount of cash in order to attract customers and further gain market share. Its revenue rose seven times to ₹380.2 crore in FY 2014-15 from ₹49.6 crore in FY 2013-14. But its net loss also widened to ₹754.8 crore from ₹34.2 crore, as total expenditure surged 14 times to ₹1,173 crore.