Homegrown cab aggregator Ola is in the midst of a funding round that could see its valuations rise to $5.5-6.5 billion. That's a jump of up to 51% in just a month. The company is reportedly finalising a $100 million (around Rs 735 crore) investment from existing investor Hong Kong-based hedge fund Steadview Capital.
"Steadview is putting a large sum of capital as part of the round where Sachin Bansal is also investing. While a bunch of the transaction is in secondary sale of shares, the primary money is coming at a higher valuation," a person privy to the deal talks told The Economic Times.
Eyebrows were raised earlier this month on reports that Bansal would be making one of the biggest personal investments in the Indian Internet space by pumping money into Ola. The thirty-something co-founder of Flipkart exited the company after selling his entire shareholding of 5.5% to Walmart.
The buzz about Ola's latest funding round comes a little over a month after it raised $50 million at a valuation of $4.3 billion from Hong Kong-based Sailing Capital and the China-Eurasian Economic Cooperation Fund (CEECF). That investment gave both entities a stake of about 1.17% in ANI Technologies, Ola's parent.
In October last year, Ola had raised $1.1 billion in fresh funds at a valuation of $3.4-4 billion from China's Tencent Holding Ltd and Japan's SoftBank Group Corp. It is then that Ola had indicated that it is in talks to raise another $1 billion. According to the daily, the company has been targeting a higher valuation of $6-7 billion for the additional capital.
The Bengaluru-based company is striving to become profitable in its core taxi aggregation business even as it expands internationally and pushes its food delivery vertical under Foodpanda. "In the past year, there has been a palpable slowdown in the taxi business, along with supply constraints. In order to shore up demand among investors, Ola has to show growth in new categories, which is why they have decided to pump money in pushing Foodpanda," another source told the daily. Just last week the food delivery company announced the launch of its network in 30 additional cities across the country.
(With PTI inputs; edited by Sushmita Choudhury Agarwal)