[Ola, which is based in Bangalore, in southern India, said it planned to use the new funds to invest in artificial intelligence and machine learning to tackle projects such as predicting where and when a regular customer might need a car. The ride-hailing company is also spending heavily on a program to buy vehicles and lease them to drivers, and it is experimenting with electric cars in some cities.]
By Vindu Goel
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A driver for Ola in
Bangalore, India. Further investment for the ride-hailing
company is likely to come from
investment firms in the United States.
Credit Atul Loke for The
New York Times
|
MUMBAI, India — India’s leading ride-hailing
service, Ola, said on Wednesday that it had raised $1.1 billion in new funding,
giving it a bulging war chest to battle Uber in a country where only a tiny
portion of the population owns cars.
The lead investor in the funding round was
Tencent Holdings, the Chinese technology giant that owns WeChat, an all-purpose
app that many Chinese use to send messages, buy products, transfer money, read
news and hail cabs.
SoftBank, a Japanese technology investor that
was already Ola’s largest shareholder, also put in money. The additional
funding puts SoftBank in an awkward position, since it is also in the final
stages of making a large investment in Uber. Ola recently changed its bylaws to
limit SoftBank’s control over its operations.
In announcing the new investment, Ola said it
was in advanced talks to land an additional $1 billion. Much of that is
expected to come from investment firms based in the United States. American
interest in India has been on the rise after a hemorrhage of cash at some
high-profile consumer internet start-ups, including Ola, had cooled enthusiasm.
Tencent and Alibaba, another Chinese internet
giant, have also been aggressively investing in Indian tech start-ups.
Investors in the United States and China view the emerging middle class in
India as an important market, and they want to back companies that can win over
those customers.
Ola, which is based in Bangalore, in southern
India, said it planned to use the new funds to invest in artificial
intelligence and machine learning to tackle projects such as predicting where
and when a regular customer might need a car. The ride-hailing company is also
spending heavily on a program to buy vehicles and lease them to drivers, and it
is experimenting with electric cars in some cities.
Ola is losing hundreds of millions of dollars
a year in India, according to its most recent financial filings. Uber is doing
little better.
Uber’s prices in India are generally lower
than Ola’s, an advantage in this price-sensitive country. Uber also benefits
from the resources of a global company, including advanced mapping technology
and an app that works in any of the dozens of countries in which it operates. Ola
is in more Indian cities than Uber is, but it is unavailable outside India.
Ola has been trying to break its cycle of
operating losses by curbing discounts and driver incentives, while rolling out
innovations to attract users.
The company offers free Wi-Fi in many of its
vehicles, and about a year ago, it introduced a premium subscription service
for about $8 a month that gives frequent riders special benefits such as
priority booking and an escape from surge pricing during times of peak demand.
Ola also offers a range of vehicle options,
from the three-wheeled auto-rickshaws that are extremely popular in India to
the luxury sedans aimed at business executives and foreign visitors. And the
company has branched out into online payments with its Ola Money service.
Uber, which is based in San Francisco, has
been distracted recently by management turmoil, boardroom infighting and
clashes with government regulators. But the company’s new chief executive, Dara
Khosrowshahi, has signaled that he intends to compete vigorously in emerging
markets like India and Indonesia.
