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.