Ola, the largest rival to Uber in India, has announced that it has raised a $400 million Series E round to fuel further expansion in India.
The company, which was found to have raised $310 million last week according to filings, is aiming to grow its network to 200 cities in India before the end of the year. It currently serves over 100 cities, but it covered just 10 locations a year ago. (For comparison, Uber is in 11 cities in India, at this point.)
Ola’s Series E round was led by DST Global, and it included participation from new investors GIC, Falcon Edge Capital, and existing backers SoftBank, Tiger Global, Steadview Capital and Accel. It values the company at $2.5 billion, and takes Ola well beyond $600 million from investors to date.
Anand Subramanian, director of marketing communication at Ola, told TechCrunch in an interview that the company plans to reach smaller towns in India where it believes its services can have a significant impact.
“The next wave of growth will come from smaller towns and cities where personal transportation is nonexistent. [These cities have] smaller populations, but there’s a genuine need,” Subramanian said.
In those smaller locations, Ola’s challenge is two-fold: enticing existing taxi drivers on to its platform and also convincing people to take up driving as a career. To that end, Ola has struck deals with car makers and loans companies to help make the cost of vehicle ownership palatable for its drivers. (Subramanian said 70 percent of Ola drivers own their vehicle outright or are paying it off.)
Related to that, Ola has set an ambitious target to reach 1 million drivers on its platform within the next three years. Currently the service has over 100,000 drivers, having grown that number from 10,000 one year ago.
Despite its quick progress in India, Ola is not looking overseas at this point.
“The opportunity in India is very, very large, we have a huge problem to solve,” Subramanian said.
And it’s easy to see that Ola’s vision is still very much in progress since, with a network of 200 cities under its belt, the company would have real potential to introduce other logistics-related services.
Food on-demand service Ola Cafe is its first move beyond taxis. The service covers four cities and is currently in “beta.” Subramanian declined to discuss more details about Ola Cafe or other services, but with Uber and Uber rivals moving into such spaces, it seems like a future for Ola too.
$100 million of the new funding will also go towards TaxiForSure, the company which Ola acquired for $200 million. Like Ola, the plan will be to expand its network into more cities in India.