ANI Technologies, the parent company of Indian ride-hailing giant Ola has decided to hive-off its financial services business Ola Money into a separate company to let it raise funds independently, a move that will further intensify the competition in India’s already crowded fintech space.
Ola Money offers services such as short-term credit, mobile wallet, insurance, and utility bill payments to its users.
“The company’s board approved the move to hive off Ola Financial Services, which operates Ola Money,” local media Economic Times quoted a source in a report.
Ola’s bet on financial services also comes after the company applied early in January for a non-banking finance company (NBFC) license. The firm aims to launch a credit card by partnering with State Bank of India, and also plans to sell insurance products to its driver-partners and users. Through its Ola Money Postpaid, it already provides a short term credit service that allows its users to pay for their rides later.
The ET report cited another source in the know who said Ola Money Postpaid is already a profitable business and that the product has helped bring in more high-value customers to its taxi aggregation platform. Over the next few months, Ola will reportedly go more aggressive to grow its credit cards and health insurance verticals.
An investor told ET that Ola’s financial business alone is on the path to being IPO-ready in the next three or four years.
Although Ola is already quite deep into its fintech endeavor, its competitor Uber India also has plans to get into this segment. The global ride-hailing company launched Uber Money in October this year. On its blog, the firm announced that a team is working on creating financial products and technologies to support both Uber riders and drivers. However, the service will be launched in India in the next six to eight months, according to a media report.
Ola has been trying to diversify from its core offering as it veered into food delivery, fintech, self-drive renting vehicles, electric mobility, and Ola Play, an in-cab entertainment platform. It has already conceived its electric vehicle arm Ola Electric into a separate entity, which itself is worth over a billion-dollar and has raised money from Japanese telecom giant SoftBank.
In food-tech space, the company operates under the brand name Ola Foods, a cloud kitchen and physical restaurant business. The firm kicked-off with the launch of Khichdi Experiment, earlier this month.