All early investors in cab aggregator TaxiForSure (TFS), which was acquired by ride-hailing firm Ola three years ago, are looking to sell their shares at $150-200 million.
TFS investors are eyeing an exit from Ola as they need to show liquidity from these investments, said a TOI report quoting a person close to the development.
Investors including venture capital funds Helion Venture Partners, Bessemer Venture Partners, Blume Ventures and Accel Partners are planning to sell their shares along with some of Ola’s shareholders. TFS shareholders have around 3 per cent in Ola.
Japanese conglomerate Softbank and Chinese tech behemoth Tencent, which are existing shareholders, are reported to buy out the stake held by these investors at a valuation of $3.5-4 billion, the report added. SoftBank holds more than 25 per cent stake in Ola while the New York-based investment fund Tiger Global has a 15 per cent shareholding with Tencent at 9 per cent. Early backer Matrix Partners has an under 10 per cent ownership in Ola.
Meanwhile, Ola is also reportedly in talks with Singapore’s sovereign wealth fund Temasek and other investors to raise $500 million-$1 billion.
For ride-hailing firm, this will be the first secondary sale by its investors. However, the secondary sale is not something new in startup eco-system. Earlier, Paytm, PayU and Flipkart sold part of shares in the secondary sale, which made their employees richer. Generally, it takes place at a discounted price.
The development is taking place at a time when Ola claims to have a leading position over its rival Uber. Notably, both of them now have a common investor as SoftBank.
CEO of Uber, Dara Khosrowshahi, on his recent two-day trip to India said that the firm will continue going aggressively in India.
In India, for the past two years, both the companies have been at loggerheads. According to a market and competitive intelligence company, Kalagato, Ola has witnessed a rise in market share from 53 per cent in July 2017 to 56.2 per cent in December last year. Meanwhile, Uber market share decreased by about 2.4 per cent from 42 to 39.6 per cent during the same period.
Ola had raised massive $2 billion from SoftBank and Tencent last year. The Bengaluru-based company also has been playing proactive moves in electric vehicle segment.
Currently, it runs a fleet of electric vehicles in Nagpur and had invested upwards of Rs 50 crore towards EVs and charging infrastructure in the orange city.
Founded in 2011, Ola claims to have 12.5 crore registered users in India and more than 10 lakh driver partners in more than 110 cities. The company serves as many as a billion rides in India annually through its platform. Last month, it launched its operations in Mizoram’s capital Aizawl.
Ola recently started operations in Australia, where Uber dominates, with much lower commission rates of 7.5 per cent for drivers as compared to 20 per cent charged by Uber.
We have updated the headline to reflect an amount of equity to be sold in the secondary sale.