Can new business routes take Ola closer to $12-bn valuation?

Ride-hailing business has slowed after the pandemic, and Ola needs new growth boosters to gain momentum ahead of its IPO. The company is diversifying to selling pre-owned cars and reattempting food and grocery plays. Will the strategy deliver?

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By 

Aditi Shrivastava

November 15, 2021

11 Min Read

It’s hard to imagine how Bhavish Aggarwal feels right now. The two ventures he founded are on very different trajectories: one faces considerable headwinds, another the best conditions.

Ola, launched in 2010, became a market leader in mobility after 17 funding rounds and a bruising battle with competitors, mainly Uber. But the pandemic upended the ride-hailing sector, blunting Ola’s hard-earned advantage and slowing growth.

Four-year-old Ola Electric, in contrast, is one of the fastest startups in the electric vehicle (EV) space to raise capital and land a valuation of $2.7 billion (as of October 2021), according to regulatory filings. Media reports indicate the firm has hired bankers to raise an additional $1 billion.

Aggarwal has effectively seen both sides of fundraising. “It took him over a decade to build Ola. But just four years after launch, Ola Electric is already close to exceeding Ola’s valuation (at least in the secondary market),” said a person tracking Ola’s journey.

This is a crucial moment for Ola as it eyes momentum and a pickup in valuation ahead of its planned initial public offering (IPO). To get there, it is diversifying to new and newish business areas:

  • Pre-owned cars
  • Grocery
  • Food delivery

THE UPSHOT

ANI Technologies, Ola’s parent company, is eyeing a new funding round that will help it benchmark its share price ahead of an IPO. The company is targeting a market debut at a valuation of $12-15 billion

Ola’s parent company, ANI Technologies, is in talks to raise fresh funds at a valuation of $7 billion, two people briefed on the development told The CapTable. In July, Warburg Pincus and Temasek Holdings bought $500 million of Ola shares from existing investors Tiger Global and Matrix Partners India at a $3.8-billion valuation.

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