Ola raises $2 billion from Softbank, Tencent, to push its EV project

Bengaluru-based cab aggregator Ola has raised $2 Billion in a fresh funding round from Chinese Internet giant, Tencent and Softbank Group Corp among other existing investors, according to a person familiar with the development.

Tencent has put in nearly $400 Mn into the ride-hailing startup, taking the latter’s valuation to $3.8 Bn. "The investment has been completed and the understanding is that a sizeable portion will be allotted towards boosting the electric vehicle segment," sources were quoted in the other report.

Also Read: Loss making Ola plans to foray into Electrical Vehicles market

According to Bloomberg report, the deal will help Ola shore up its lead in India and build its supply of vehicles and drivers as well as technology to help it win against its archrival Uber.

This deal will help Indian cab major to win against Uber as they will more focus on India as well as on increasing their supply of cars and the drivers and more on strategic technology.

Ola and Uber are competing with each other in the India and also in other countries. Ola said to be consolidating its position in the market to have the advantage over Uber.

Home-grown cab aggregator plans to address the problem of shortages of drivers in lower-tier cities and builds Ola's business outside of major metropolitan areas.

According to the several reports, Ola was the market leader in August having completing approximately 1.5 million rides per day whereas Uber had 1.3 billion per day. Uber too is giving it neck to neck competition. However, Bengaluru-based company is in more than 129 cities whereas Uber has a presence in almost 30 cities in India.

Earlier this year, Uber exited direct operations in Russia. In 2016, it had sold its China-business to rival Didi Chuxing. Softbank's Vision Fund and Tencent had also invested a total of around $4 billion in e-commerce giant Flipkart this year.

Softbank: Website