Ola Expected to Raise Around USD500 Million Funding
India: Indian radio taxi giant,
Ola is expected to raise around USD500 million in a new round of funding
through its current investor, SoftBank. The step taken by the company is a
confronting move against its biggest rival, Uber in the Indian market. Uber
exited from China’s market and doubled down on Indian market, which made it crucial
for Ola to raise new capital.
According to some sources,
Ola might hold a formal fund-raising process to bring foreign investors for
leading the new financing. As per Ola, the company has around 70% share in the
taxi app market in India clocking around 1 million rides per day.
“Even in the top six cities,
we have over 75% market share against our nearest competitor. These cities
account for over 90% of our business,” said Aggarwal, co-founder of Ola.
Further, Uber started a 360-degree
advertising campaign, first of its kind, stating that it would purchase 200,000
passenger vehicles for its drivers and to pump up the driver subsidies and
customers. Both Ola and Uber are anticipated to burn $20-30 million every month
as they try to attract customers on to their platform.
According to a recent report published by TechSci Research, “India
Radio Taxi Services Market Forecast & Opportunities, 2021”, rising demand for radio taxi services in India can be
attributed to changing lifestyles of travelers and increasing disposable
income. Moreover, radio taxis offer hassle free travel experience to customers.
Increasing investments by venture capitalists, and rising radio taxi usage by
individuals, corporates and tourists is boosting demand for radio taxi services
in India. Additionally,
growth in India radio taxi services market is being supported by leading OEMs
such as Hyundai, Tata, Maruti Suzuki, etc. who offer car models specifically
for radio taxi.
As per TechSci Research, the
move taken by Ola is likely to expand the company’s growth in the Indian
industry, wherein, the company would able to provide better set of services. The
move by the company is anticipated to further intensify the competition between
the two leading companies in the radio taxi market of the country.