Ola, the IPO-bound mobility platform, said on December 16 that it has received $500 million in debt financing through a Term Loan B route from prestigious worldwide institutional investors, joining the ranks of Byju’s and Oyo.
While the business would not reveal the identities of individual investors, it claimed to have obtained a $1.5 billion commitment from them.
The term loan will be used to advance the firm’s vision for the future of mobility across industries such as ride hailing, vehicle commerce, food delivery, rapid commerce, and financial services, according to the company. The joint lead arrangers for this financing were J.P. Morgan and Deutsche Bank.
Moody’s Investors Service gave the company’s planned term loan a first-time B3 corporate family rating (CFR) in November, while S&P gave it a B- with a stable outlook.
“The overwhelming response to our term loan B is a reflection of the strength of our business and our continued focus on improving unit economics alongside rapid growth. At Ola, we are accelerating our journey towards building the New Mobility ecosystem to help a billion people move sustainably” said Bhavish Aggarwal, Founder & CEO, Ola.
This statement comes only days after Ola Electric began delivering its long-awaited electric scooters on December 15. The ride-hailing company based in Bengaluru said that it has supplied scooters to 100 clients in Bengaluru and Chennai.
After selling approximately Rs 1,200 crore worth of scooters in September 2021, Ola has been under fire from customers in recent weeks for its scooter delivery delays.
Edelweiss has put in around Rs 250 crore, IIFL has put in approximately Rs 187.5 crore, while Hero Enterprise has put in approximately Rs 112.5 crore.
Ola has also allocated shares worth Rs 100 crore to erstwhile Zandu founders Parikh family and Siddhant Partners, as well as shares worth Rs 50 crore to Biovet, a company that produces animal health vaccines.
Ashutosh and Sanjeev Taparia of Famy Care Group have been given shares worth Rs 13 crore each, while Vicco Group has been given shares worth Rs 10 crore. Ola had already secured $500 million in funding in July of this year, sponsored by Temasek and Warburg Pincus.
Meanwhile, Ola Electric, which was spun off of ride-hailing giant Ola in 2019, raised $52.7 million (Rs 398.3 crore) from Temasek, IIFL, Edelweiss, Vijay Shekhar Sharma’s VSS Investco, and Rahul Mehta of DST Global.
This funding comes just a few months after the company secured $200 million in September from Falcon Edge, SoftBank, and others at a $3 billion valuation.
Ola, which is preparing to go public next year, has seen a flurry of departures in recent weeks, including Chief Financial Officer Swayam Saurabh, Chief Operating Officer Gaurav Porwal, General Counsel Sandeep Chowdhury, and Ola Electric’s Head of Quality Assurance Joseph Thomas.
The company has also re-entered the online grocery delivery market, launching services in Mumbai and Bengaluru with around 15 dark storefronts.