Ola Likely To Hit $5.5Bn Valuation With Steadview’s $100M Investment

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Source: Wikipedia

Ola is finalising a $100 million (about Rs 735 crore) investment from its existing backer Hong Kong-based hedge fund, Steadview Capital, as the ride-hailing company continues on its capital raising spree. This is as per a report in the Economic Times.

Source: Linkedin

The ongoing financing round is expected to value Ola at $5.5-$6.5 billion. The latest valuation for Ola is the highest that the urban transportation company has been able to ratchet up till date.

“Steadview is putting a large sum of capital as part of the round where Sachin Bansal is also investing. While a bunch of the transaction is in secondary sale of shares, the primary money is coming at a higher valuation,” a person privy to the deal talks said.

Source: Zee News

Last year, Ola had raised $1.1 billion at a valuation of close to around $4 billion, and had said at that time it will raise another $1 billion. The company has been targeting a higher valuation of $6-$7 billion for the additional capital.

It has been reported earlier that Flipkart’s co-founder and its longest-serving CEO, Sachin Bansal is likely to invest $100 million in the company, and which could go up to $150 million. The capital infusion by Steadview is part of the same ongoing round, sources said.

The developments come a little over a month after Ola, which competes with global ride hailing major Uber, raised $50 million from two new Chinese investors — Sailing Capital, an investment fund backed by the Communist Party-owned financial services major Shanghai International Group, and China Eurasian Economic Cooperation Fund.

That investment gave both entities a stake of about 1.17% in ANI Technologies, the parent company of Ola.

The Bengaluru-based company is striving to become profitable in its core taxi aggregation business even as it expands internationally and pushes its food delivery vertical under Foodpanda.

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“In the past year, there has been a palpable slowdown in the taxi business, along with supply constraints. In order to shore up demand among investors, Ola has to show growth in new categories which is why they have decided to pump money in pushing Foodpanda,” said another source who is privy to the goings-on.

Bhavish Aggarwal—who cofounded Ola with Ankit Bhati– has also been fighting to keep his rights intact to avoid Japan’s SoftBank, the company’s largest shareholder, from bulking up its stake.

At present, Softbank owns a little over 26% in the company, with Aggarwal and Bhati, cumulatively, holding 13%-15%. Steadview, which first invested in Ola in 2014, holds a 1.35% stake in the company.

While it isn’t clear if Bansal and Steadview founder Ravi Mehta will be given voting rights, they will be key allies for Aggarwal. Singapore’s sovereign wealth fund, Temasek, recently came on board Ola, and would vote along with the company founders, strengthening the founder’s position on the board, according to sources.

Among the leading names in the country’s startup ecosystem, Bansal and Aggarwal came together publicly to voice concerns over the perceived lack of a level playing field for domestic internet startups.

The two founders later banded with other local startups and entrepreneurs to launch an industry group called IndiaTech. Bansal, though, has stepped down as a founding member of IndiaTech after Flipkart’s acquisition by Walmart.

Steadview’s Mehta is also a part of IndiaTech and has been a vocal proponent of local founders getting a level playing field against the likes of Amazon and Uber.

The $100 million cheque from Steadview is the largest investment amount that the fund has pumped into any of its portfolio companies here in India. Steadview has backed the likes of Flipkart, online furniture retailer Urban Ladder, online insurance aggregator PolicyBazaar and music streaming app Saavn.

Earlier this week, it was reported that Steadview Capital had invested $30 million in IndWealth, the wealth-tech platform launched by Ibibo Group Founder Ashish Kashyap, which is still in stealth mode, making this the largest seed round investment in a home-grown startup.

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