Ola Cabs to receive $400mn funding soon

Ola Cabs to receive $400mn funding soonNew York-based hedge fund Falcon Edge and Silicon Valley venture fund Accel Partners are expected to join DST Global which is leading a soon-to-be-announced $400-million financing round in taxi hailing service Ola, sources close to the matter told TOI.

Falcon Edge is expected to pump in around $20 million in the new round while Accel US will put $5 million, sources said. Accel US was an investor in TaxiForSure (TFS) and became an Ola shareholder post its recent acquisition. Ola's other existing investors -including Tiger Global, Matrix Partners, Steadview Capital --are also participating in the new financing round.

The latest fund-raise is likely to value the company at $2.5 billion post the investment, as reported by this newspaper first in its February 26 edition. Russian billionaire Yuri Milner's DST, a significant investor in e-commerce biggie Flipkart, is expected to hold just under 10 per cent stake in the four-year-old company , post the new round.

When contacted by TOI, Bhavish Agarwal, co-founder, Ola, did not offer any comments, while Falcon Edge could not be reached immediately for a response. Founded by Richard Gerson together with Navroz D Udwadia and James Minshull, Falcon Edge leads the pack of a new breed of Wall Street hedge funds, a Tiger Global offshoot, managing more than $4 billion in assets. Its India investments include realty portal Housing and NewsHunt, a mobile news aggregation service.


Hedge funds like Falcon Edge, Valiant Capital and Steadview Capital, among others, funneled big money into Indian consumer internet companies last year, fanning the already frothy valuations of these tech startups.

The latest round of fundraise for Ola, founded by IITBombay batchmates Aggarwal and Ankit Bhati in 2011, would put it right up in the league of the most valuable internet firms domestically .Ola's $210-million fund-raise led by SoftBank in October last year valued it at $650 million -post-money -making the Japanese investor the startup's largest investor.

The cab aggregator is present across 67 cities and has received $277 million of capital across five financing rounds. Its biggest competitor taxi-hailing app Uber had stepped on the gas in India by doling out huge discounts to riders. However, its growth has stalled considerably post the rape of a female passenger by one of its drivers last year in Delhi.