Temasek To Take A 5% Stake In Ola For $150-200 Million
IMAGE CREDIT @OLA
OLA was valued at around $6.3 billion in 2019 with Softbank having the larger stake. as of today, the company has over 1.5 million drivers across 250 cities around India. Ola claims to get over 150,000 bookings daily through its mobile app. the company expanded into the international markets in 2018 in Australia and New Zealand and by early 2019 started its operations in the UK and as of now has over 25000 registered drivers in the country. In March 2021 Ola announced its plans to build the world’s largest two-wheeler plant in Tamil Nadu with a production capacity of 10 million units
After the investment round, some of Ola’s early employees, including Rehan Yar Khan (VC), investors Accel India, Bessemer Venture Partners, Texiforsure founder Aprilameya Radhakrishna Raghunandan G, etc., sold their shares in the company. Having strong investors on board will give Ola an advantage in raising capital in the future, experts say.
At the same time, Ola is trying to raise capital through a combination of primary and secondary capital in a separate business. Under the deal, Temasek is expected to buy 150-200 MN of secondary shares in Ola, providing a significant exit for the company’s early investors.
The investors include venture capitalists Accel India, Bessemer Venture Partners, Helion Venture Partners and Taxiforsure, whose founders Aprilameya Radhakrishna and Raghunandan G partially quit. Temasek’s ANI will seek CCI approval for the deal. In addition, Bhati Aggarwal will be an indirect subsidiary of Temasek, Macritchie Investments. ET first reported on talks about a deal between Temasek and Ola in its March 6 issue. The development comes after the Aggarwals Group blocked a move last year for a possible secondary sale of a stake in Tiger Global to SoftBank, according to sources.
Singapore-based Temasek Holdings will buy $30 million worth of shares from former employees of taxi firm Ola in a secondary share sale. The secondary sale will value the company at $2.5-3 billion and be completed by the end of May. The acquisition will enable a large-scale ESOP payout by the company’s former employees.
OLA must provide incentives for drivers to use its application as a preferred way to attract customers, in the face of stiff competition from Uber, which, for some reason, industry experts say has led to huge money burnings. The company has partnered with several automakers, including Maruti Mahindra, Mahindras, and BMW, to help drivers purchase vehicles with better financing terms.