Will Meru be second-time lucky in fight with Ola, Uber?

Andrew Cummings
October 11, 2017

Ola said existing investor SoftBank was among those providing fresh funds, and that it was seeking to raise another $1 billion.

Without disclosing when and at what valuation, cab aggregator Ola in a statement said that it has entered into billion league and raised $1.1 billion in funding led by Tencent Holdings and is in advanced talks to close an additional $1 billion to conclude a total mop-up of over $2 billion.

The company will utilise the funds for making strategic investments in supply and technology.

The company will make significant technology investments into Artificial Intelligence and Machine Learning capabilities to solve for India's unique mobility problems.

The company, which now has a majority share of India's ride-hailing market, operates in 110 cities and has a wide range of transport options including bikes, auto-rickshaws and electric cars.

Confirming the fundraise, Bhavish Aggarwal, co-founder and CEO of Ola, stated, "We are thrilled to have Tencent Holdings join us as new partners in our mission to build mobility for a billion Indians".

Ola needs massive amounts of capital as it is locked in a bruising battle with the local unit of Uber Technologies, the world's most valuable and deep-pocketed start-up, which is also in talks to raise funding from SoftBank. The strategic partnership with Ola makes it possible for Tencent to be part of the fast-growing ride-hailing space in the country. In November 2016, SoftBank had invested Dollars 250 million in Ola.

Once the second tranche is complete Ola would have raised over $2 billion. "We look forward to helping Ola further develop India's transportation solutions", Martin Lau, President of Tencent Holdings, said in a statement. Among them, the San Francisco-based firm and its new CEO Dara Khosrowshahi are fighting to continue operating in London - one of Uber's biggest markets - while also going up against Google's Waymo in court over allegedly stolen self-driving vehicle technology.

Indian taxi company Meru Cabs has stepped up its legal challenge against local competitor Ola and US rival Uber, alleging the firms are abusing their market position, and believes that planned investments in both by Japan's SoftBank underscore its view. After it sold its Chinese business to Didi Chuxing in August, succeeding in India has become one of the top priorities for Uber.

Ola noted it now operates in 110 cities and focuses exclusively on its home market.

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