Chinese internet major Tencent is likely to lay one of its most significant bets in India as it closes in on a $400-million (over Rs 2,500crore) investment in the homegrown ride-hailing startup Ola, two people close to the matter said.

The capital from Tencent will give much-needed firepower to Ola, which has been on a fund-raising trail since last year and been wanting to get on board a heavyweight investor to offset SoftBank’s dominance as the largest shareholder in the Bengaluru-based company.

10 popular startups backed by Ratan Tata

​10 popular startups backed by Ratan Tata
Paytm
Ola
Xiaomi
Snapdeal
Zivame
Urban Ladder
CashKaro
UrbanClap
Lenskart
Cardekho

​10 popular startups backed by Ratan Tata

Putting his faith in fresh talent across various industries, Ratan Tata has invested in over 30 startups in his personal capacity. Among these, a lot are technology-based. We have curated a list of 10 popular technology startups that have managed to secure funding from the chairman emeritus of Tata Sons:

Paytm

Without a doubt, Paytm is among the most popular mobile wallet services in India. It allows users to pay via the app (using QR codes) and send money to digital wallets tied in to mobile numbers. Paytm has a limit of adding up to Rs 20,000 per month. However, the limit can be increased for users who are KYC-verified. There’s a lot more one can do on Paytm like getting mobile recharges done, paying utility bills, booking movie tickets and more. The startup secured an undisclosed amount of funding from Ratan Tata in March 2015. Tata picked up a stake in One97 Communications, the parent company of Paytm. With the funding, he also took up the role of an advisor for the company.

Ola

Ola Cabs is India’s answer to Uber. Much like Uber, the app allows users to hail a taxi with just a few taps on their smartphone. Ola provides cab services across all price segments, ranging from economic to luxury. The company began operations in 2010 and secured funding from Ratan Tata in July 2015. The chairman emeritus of Tata Sons invested in the company in his personal capacity. Tata’s venture capital firm RNT Capital Advisors also made an investment of Rs 400 crore in Ola a few days back.

Xiaomi

Did you know that Ratan Tata is the first Indian to buy a stake in Xiaomi? It’s true, even though the amount Tata invested in the Chinese tech giant was not disclosed. For those who don’t know, Xiaomi is an electronics company based in Beijing and is the best known for its affordable smartphones that are hugely popular in India. Other products that it makes include laptops, air purifiers, tablets and more. Although Xiaomi started its operations in China in 2010, it came to India in 2014. After getting the funding, a few senior executives from Xiaomi were quoted as saying that they would seek Tata’s advice on how to expand to international markets.

Snapdeal

Snapdeal is the first e-commerce company that Ratan Tata invested in. He is believed to have picked up a 0.17% stake in Snapdeal in August 2014, when he invested less than Rs 5 crore. Tata bought 256 shares from the e-commerce company’s angel investors, including Kenneth Glass. The news came right after Snapdeal tied up with Tata Value Homes to sell apartments across five cities (Bangalore, Chennai, Pune, Mumbai and Ahmedabad). The company started out as a daily deals platform in 2010, but expanded to become an online marketplace in the very next year.

Zivame

Founded in 2011 by Richa Kar and Kapil Karekar, Zivame is an online lingerie selling platform. The startup gained popularity with their quirky campaigns and today, it has become a recognized brand in itself. Zivame raised a funding from Ratan Tata in September 2015. However, other details about the investment weren’t disclosed. Later, the company reportedly said that it planned on using the money to develop technology and strengthen its customer base.

Urban Ladder

Urban Ladder is a popular furniture selling platform based in Bengaluru. It is currently present in 12 cities around India. The online furniture retailer secured funding from Ratan Tata in November 2015. After Snapdeal, it was Tata’s second personal investment in an e-commerce firm. Like most of his other investments, the amount wasn’t disclosed, but Urban Ladder issued a statement saying that Tata’s inputs and guidance would be very valuable for them.

CashKaro

Cashkaro is a website where users can find cashback schemes and coupons. The Gurgaon-based company was founded in 2013 by Swati and Rohan Bhargava, and raised an undisclosed amount of funding from Ratan Tata in January 2016. The company reportedly said that it intended to use the money for building its technology, entering the international markets, as well as for brand awareness and hiring senior-level talent.

UrbanClap

Services marketplace UrbanClap raised an undisclosed amount in funding from Ratan Tata in December 2015. For those unaware, UrbanClap allows users to book services online. These include everything from plumbing to electrical work.

Lenskart

Lenskart, the popular online retailer that sells eyewear such as sunglasses, eye glasses, contact lenses and more, secured funding from Tata in April 2016. However, an official from the company reportedly said that Tata’s role was more of a mentor/advisor rather than a financial investor.

Cardekho

Ratan Tata’s list of investments also includes Cardekho, an online marketplace where users can buy and sell both new and used cars. The business tycoon picked up shares of Jaipur-based GirnarSoft, parent company of CarDekho.com, BikeDekho.com and PriceDekho.com portals. Like most of Tata’s deals, the amount invested by him wasn’t disclosed. That said, it was reported that Tata had bought a minority stake for himself in the venture. (Disclaimer: Times Internet is an investor in Girnar Software Pvt Ltd, which runs auto portal CarDekho.com)

This will be Ola’s largest fund raise in about two years, since it mopped up $500 million from the likes of Singapore’s sovereign wealth fund GIC, China’s largest taxi aggregator Didi Chuxing and Scottish investment fund Baillie Gifford, among others, in 2015.

Tencent, an investor in Didi Chuxing which in turn holds a small stake in Ola, has been the most active late-stage investor in India this year after it took a wager on Flipkart in a $1.4 billion financing round, backed Hike a messaging app and online education platform Byju’s recently.

“The deal with Tencent is an extension of the funding round which kicked off last year. Ola wanted to get a more strategic investor with a long-term view of the market which is where Tencent fits in,” said a person familiar with the development on the condition of anonymity.

In 2016, SoftBank had offered $1 billion cash to Ola valuing it at $3.5 billion, which was far lower than its previous round valuation of $4.5 billion.
While Ola went on to talk to other investors and said no to the $1 billion offer at the time, it finally did take a $250 million cheque from SoftBank at a reduced $3 billion value last year in November.

The way the round was constructed let Ola engage with investors and kept the round open for about six-seven months from the first time SoftBank put in the $250 million, sources said. Since then the taxi hailing app has racked up further capital at an increased valuation of $3.5 billion from the likes of Tekne Capital Management, a hedge fund, Falcon Edge, an existing investor and Rata Tata’s RNT Capital Advisors totalling up to $400 million. With Tencent’s money coming in the entire round totals up to $800 million, the largest sum it has raised.

“Ola did not want more of SoftBank’s capital at the reduced valuation and since it had the option of getting other investors on board and shore up the valuation it did so with some of the smaller investors till Tencent came along,” another person said who did not want to be named as the deal talks were private.

We could not ascertain the exact valuation at which Tencent has ploughed the fresh funds in the company.

This deal, if done, will come at a time when Ola’s investor SoftBank is banding together all the anti-Uber entities like Didi Chuxing and Grab Taxi, both of which have received funds from the Masayoshi Son-led Japanese group recently. Grab raised $2.5 billion from SoftBank and Didi to muscle out Uber from south east Asia.

How a bunch of startups are trying to make life easier for those in need of an ambulance

 This grouping is evidently posing a huge threat to the already troubled San Francisco-based transportation company which saw its go-for-broke founder & CEO Travis Kalanick step down amid a string of sexual harassment and workplace issues engulfed the startup since the beginning of the year. Uber is also battling Google’s parent Alphabet’s lawsuit which alleges that Uber stole the search giant’s proprietary trade secrets around self-driving technology.
Bhavish Aggarwal, co-founder & CEO, Ola did not respond to an emaiedl query till the time of going to press, a Tencent spokesperson also did not comment on the matter.
While Ola and Uber are fiercely fighting against each other in India both these players have been cutting down on driver incentives and discounting for riders to spruce up their unit economics. For the fiscal year 2016, Ola’s standalone losses stood at Rs 1,760 crore while revenues for the same year grew to Rs 664 crore. ANI Technologies, which runs Ola, recorded expenses for advertising and sales promotion at Rs 385 crore, a jump of almost four-fold compared to year ago. These expenses were primarily towards brand building and costs incurred on customer acquisition that builds and enhances the market share of the company, Ola had said.
Ola, which has maintained its market leadership in the local market and been regularly launching new products like a membership programme ‘Select’ and ‘Ola Credit’ which lets customers take a ride and pay later, claims to be clocking an average 1 million rides per day. While Uber publicly said it is registered 5.5 million rides weekly making India its second largest market. Consultancy firm RedSeer estimates that app-based cab companies together clock about 1.5 million rides per day where bulk of the rides are accredited to Uber and Ola.

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