Ola Financial Services kicks off maiden round at $238 Mn valuation; CEO quits

Hiving off companies from its large-scaled parent is not a new thing in India. Flipkart did with PhonePe and Paytm with Paytm Mall. However, Ola has done it a few times. After food and Electric, the company hived-off Ola Financial Services in November last year.

Now, the six-months-old firm has raised Rs 205.6 crore in its Series A funding round led by Matrix Partners. The Paolo Alto-based VC was joined by Falcon Edge, Gemini Investments, and Arun Sarin’s family office in Ola Financial’s maiden funding round.

The Bengaluru based company has allotted 246,747 Series A CCPS to the above-mentioned investors at an issue price of Rs 8,330.9 each share, valuing it at around $238.3 million as per regulatory filings analyzed by Fintrackr.

Matrix has invested Rs 89.4 crore and now controls a 5% stake in Ola Financial while Falcon Edge has invested Rs 71.5 crore through Alpha Wave Incubation for a 4% equity stake in the company.

Gemini Investments and Sarin Family LLC have invested Rs 37.5 crore and Rs 7.15 crore for a 2.1% and 0.4%  stake respectively.

While the valuation appears to be eye-popping for an early-stage entity in its maiden round, this is the second time a hived-off entity of Ola has been valued at over Rs 1,000 crore. Ola Electric took only a few months from incorporation to become a unicorn.

Significantly, the funding for Ola Financial Services has come around the time the CEO of the financial arm of ANI Technologies, Nitin Gupta, quit the company after a two-and-half-year long stint.

Harish Abhichandani, Group CFO at Ola, has taken over Gupta’s role. The development was first reported by ET.

Before joining Ola, Gupta was the CEO and co-founder at PayU Finance for over 5 years. He has also been an active angel investor with over a dozen companies in his portfolio.

Hived-off from the parent entity, Ola Financial Services deals in financial services layered around Ola’s consumers and partners. Registered as Zipcash Card Services, it was acquired by Ola in 2015 and has been running a consumer-centric wallet, micro-insurance, and postpaid service (use now pay later). It also has a vehicle financing vertical that helps driver-partners with loan financing, vehicle, and life insurance.