Ola to raise $800 m for a big drive into Tier 2/3 cities
On-demand taxi service provider Ola is looking to raise about $800 million (₹4,800 crore) from both new and existing investors.
The company was initially planning to raise about $500 million, but has now decided to go for a higher amount, given the rising competition from operators such as Uber.
The fresh round will be raised within the next two-three months, at least three sources said.
On completion of the fund-raising, Ola expects its valuation to rise four-fold to $10 billion from the current $2.5 billion.
The fund-raising comes in the wake of archrival Uber’s reported plans of finalising a $2-billion line of credit.
According to sources, Ola will use the funds to expand further into Tier 2 and 3 cities.
Ola wants to be present in 200 cities and towns by March 2016. It also wants to experiment with new initiatives such as Ola Cafe and grocery delivery.
Ola did not respond to BusinessLine’s e-mail query.
Ola, founded in January 2011 by two IIT Bombay alumni Bhavish Aggarwal and Ankit Bhati, has so far raised up to $800 million in seven rounds from 16 investors including SoftBank, Tiger Global, Sequoia and DST Global.
The Bengaluru-based taxi booking app raised $400 million in April.
Earlier this year, the taxi aggregator bought its competitor TaxiForSure for $200 million.
Ola is looking to replicate Uber’s model in the Indian market. For example, Ola has launched Ola Cafe, a food delivery service where customers can order food through the OLA mobile app from restaurants. Last month, it launched a grocery services — Ola Store.
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