Indian mobility major Ola has raised USD 500 million from its existing backer Temasek and Plum Wood Investment Ltd., an affiliate of global private equity fund Warburg Pincus, ahead of its initial public offering (IPO), the company said on Friday in a statement.
This round of funding comes almost after two years. The latest funding is the secondary share sale transaction wherein Ola’s early backers, New York-based Tiger Global and Matrix Partners India, which together hold 7–8% in the ride-hailing firm, have sold their partial stakes in the company, said a report by local media Economic Times, citing sources.
Singapore-headquartered Temasek first came on Ola’s cap table in 2018 with a USD 225 million check. The mobility giant also counts Japanese SoftBank and China’s Tencent as its backers.
“Over the last 12 months we’ve made our ride-hailing business more robust, resilient, and efficient,” Bhavish Aggarwal, chairman and group CEO at Ola, said in a statement. “With strong recovery post lockdown and a shift in consumer preference away from public transportation, we are well-positioned to capitalize on the various urban mobility needs of our customers.”
In 2019, Ola had said it would go public by March 2021. However, with the pandemic derailing its plans, the company hasn’t given any details on the new timeline yet.
Last year, with the onset of the COVID-19 pandemic, Ola’s core cab-hailing business came crashing down due to restrictions on mobility and transportation. By the end of 2020, the mobility unicorn started seeing a slight recovery. A RedSeer Consulting report released in May said mobility companies garnered 78 million rides in March with cab-hailing businesses showing a swift comeback. However, that didn’t last long as the second wave of the pandemic earlier in April and May again dampened the demand. Earlier in March this year, a US-based investment firm Vanguard Group, which owns less than 1% stake in Ola, slashed its valuation by half to USD 3 billion from around USD 6.5 million in 2019.
While waiting for the mobility business to recover, Aggarwal is focusing on the group’s electric vehicle (EV) business to make sure it takes off. The company recently said Ola Electric, a separate entity for making EVs, will begin the production and sale of its electric scooters from its newly built 500-acre manufacturing site.