Warburg, Temasek and Fort Canning seek CCI approval to invest in Ola

Ride-hailing service Ola is about to raise fresh funds from new and existing investors and the new round is coming after a gap of one and half years for the Bengaluru-based company which has been hit hard by the ongoing coronavirus pandemic.

Two separate applications to invest in the company were filed at the Competition Commission of India by Warburg Pincus’ Plum Wood, Temasek’s MacRitchie, Fort Canning and Ola’s founder Bhavish Aggarwal.

According to the applications, the investment represents a good opportunity for MacRitchie and Fort Canning to invest and participate in the long-term growth of the cab aggregator market in India.

While Plum Wood will acquire a minority shareholding in Ola, founder Bhavish Aggarwal will increase his share to further strengthen his involvement in the management and affairs of ANI Technologies, the parent company of Ola.

The company, however, has not disclosed the size of the deal.

If approved, this will be the first investment by Warburg Pincus and Fort Canning in Ola whereas Temasek had already bought $225 million worth of shares in a secondary transaction in August 2018.

As per revised thresholds by CCI, any company with more than Rs 3,000 crore revenue in India or Rs 6,000 crore globally will have to seek approval from the competition watchdog to raise funds. The rule also applies to the companies that have Rs 1,000 crore worth of assets in India.

Ola had last raised $300 million in a round led by Hyundai Motor and its affiliate Kia Motors in September 2019.

It’s worth noting that Ola and Ola Electric were in talks with Temasek to raise a fresh round. Entrackr had exclusively reported the development in March 2021. 

Ola declined to comment on the story.

The fresh capital is likely to increase the valuation of Ola which has been facing disruptions in its business due to the pandemic. According to a Capital Quest report, American investment firm Vanguard Group had cut the value of its investment in Ola by almost half to $3 billion from its $6 billion peak valuation during December 2019.

Ola had slashed its workforce last year and it had laid off 1400 employees in May 2020 as its revenue declined by 95% because of the lockdowns imposed to curb the spread of the coronavirus pandemic.