Mobility unicorn, Ola, has raised $500 million via a term loan B (TLB) from marquee international institutional investors. The proposed loan issuance received a staggering response from investors with interest and commitment of approximately US $1.5 billion, the ride-hailing giant said in a statement. The announcement comes at a time when the Bhavish Agarwal-led firm is pivoting to the electric vehicle segment by setting up the largest EV manufacturing facility in Karnataka.
Notably, Ola becomes the third startup after OYO and Byju’s to raise a large quantum of funds from overseas institutional investors.
Last month, edtech decacorn Byju’s said in its regulatory filing that it has upsized its TLB funding from $700 million to $1.2 billion. In July this year, OYO had raised $660 million through the TLB funding from institutional investors.
“This is a milestone transaction as Ola is among only a few Indian companies to raise capital through the TLB route. Ola is expected to utilise the term loan to fuel its vision for the future of mobility across its various businesses including ride hailing, vehicle commerce, delivery with foods, quick commerce and financial services,” according to an official statement.
Ola said that it is one of the first Indian startups to be publicly rated by Moody's and S&P, two of the leading international rating agencies. S&P and Moody's rated Ola’s first lien term loan as B- and B3 respectively, with a ‘stable’ outlook on the back of strong unit economics and profitability in its market leading Indian ride hailing business.
“The overwhelming response to our term loan B is a reflection of the strength of our business and our continued focus on improving unit economics alongside rapid growth. At Ola, we are accelerating our journey towards building the New Mobility ecosystem to help a billion people move sustainably,” Bhavish Aggarwal, Founder & CEO, Ola said.
JP Morgan and Deutsche Bank served as the joint lead arrangers for this financing.
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