Ola raises $1.1 billion in fresh funding from Tencent, Softbank

Ola raises $1.1 billion in fresh funding from Tencent, Softbank

Ola, the six-year-old ride-hailing company that operates in over 100 cities throughout India, just raked in $1.1 billion from major investors.

Cab aggregator Ola has finally confirmed $1.1 Bn funding round led by Tencent Holdings Limited almost eight days after reports of the fundraise first surfaced.

Uber and Ola have been locked in a battle for India's ride-hailing market for several years, one that Ola has been winning thus far. Following the close of the round, Ola will have a valuation of around $7 billion, a source familiar with the situation told CNBC.

Ola said it was in advanced talks to raise another $1 billion from existing and new investors, thus rounding off what may turn out to be a $2 billion funding round.

Then Mumbai-based Ola expanded its operations in March 2015 by acquiring the city-based TaxiForSure competitor for $200 million (Rs.1,200 crore) in a cash-cum-stock deal.

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"As the transportation and mobility sectors are undergoing changes globally, we want to build a competitive system to support a nation on the move", noted Aggarwal.

It also said it would invest in artificial intelligence and machine learning capabilities, which includes technologies like its in-car entertainment platform called Play that allows riders to choose music and stream videos.

With its latest round of funding, Ola will be making strategic investments in supply, technology, and innovations to build for the unique transportation needs. "We look forward to helping Ola further develop India's transportation solutions", said Martin Lau, president of Tencent. The strategic partnership with Ola makes it possible for Tencent to be part of the fast-growing ride-hailing space in the country.

According to the reports that surfaced last week, among the other backers in Ola's financing round was a VC fund jointly run by the University of California's investment arm, Ratan Tata and a number of US-based institutional investors.

The head of Meru Cabs said the company has filed four new complaints with the country's antitrust watchdog, claiming that Uber and Ola are abusing their dominance in four different cities by burning vast sums of investor funds to distort the market.

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