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After raising $250 million from SoftBank, Ola is still looking to raise additional $100 million

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We recently reported that Ola had raised $250 million in a funding round from Japan’s SoftBank Group, in November last year. However, the round was not announced officially, maybe because it was ‘down-round’. But now, according to the documents filed with RoC, the company is looking to raise additional $100 million funding.

As per the documents filed with Registrar of Companies (RoC), Ola’s board of directors has approved a capital infusion of $100 million in March this year. This development comes just four months after Ola raised $250 million. The $250 million funding round lowered the company’s valuation to about $3 billion from $4.5 billion.

In a regulatory filing, the company said:

The board of directors of the company at their meeting held on 16 March 2017 proposed the infusion of additional funds up to $100 million, which is approximately Rs670,00,07,046 by issuing 4,95,526 Series 1 preference shares of face value of Rs10, at a price per subscription share equivalent to Rs13,521 to its existing holders of equity shares on rights basis.

Ola’s authorised share capital has also been increased from Rs 5,587.10 crore to Rs 5,587.66 crore, according to the documents. The $100 million funding could be a part of the same round in which the company raised $250 million at about $3 billion pre-money valuation. Ola’s post-money valuation will be determined by the exact amount of capital it finally attracts.

The company has been trying to raise fresh capital since quite some time, and is said to be in talks with new investors to get at least $300-400 million more. Some reports suggests that if Ola gets new investors, SoftBank will invest more in the company.

As per market research firm RedSeer Management Consulting, Ola and Uber together clocked a nearly fourfold increase in the number of rides booked through their platforms in 2016 from a year earlier. Both companies together completed about 500 million rides in 2016, as against about 130 million rides the year before.

To get the bigger chunk of the market share and for its fight against Uber, the company has so far raised more than $1.5 billion funding around nine rounds, from more than 20 investors, including Sequoia Capital, Falcon Capital, DST Global, Accel Partners, among others.

Ola 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.

He has been a technology writer since more than five years. At The Tech Portal, he covers gadgets, startups and the good and bad of tech.

Email: jeet@thetechportal.in


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