Ola To Raise $500 Million From Temasek, Warburg Pincus In Pre-IPO Funding

Signage for digital payment service Ola Money, operated by ANI Technologies Pvt., is displayed on the window of a taxi in Bengaluru. (Photographer: Dhiraj Singh/Bloomberg)

Ola To Raise $500 Million From Temasek, Warburg Pincus In Pre-IPO Funding

ANI Technologies Pvt., the parent of Ola, is looking to raise $500 million in fresh funding from Temasek and Plum Wood Investment Ltd., an affiliate of Warburg Pincus, ahead of the cab aggregator’s initial public offering.

“Over the last 12 months, we’ve made our ride hailing business more robust, resilient and efficient,” Bhavish Aggarwal, chairman and group chief executive officer at Ola, said in a statement. With a strong recovery post lockdown and a shift in consumer preference away from public transportation, the company is well positioned to capitalise on the various urban mobility needs of the customers, he said.

The investment round, however, is awaiting approval from the Competition Commission of India. That’s because certain affiliates or private equity funds managed by Warbug Pincus have investments in other companies that are engaged in businesses related to services provided by Ola and group firms.

Aggarwal is also participating in the funding round in ANI Technologies, the CCI filing said. According to a separate CCI application, Fort Canning, an investment holding company, too, will participate.

BloombergQuint has reviewed copies of both the CCI filings.

Plum Wood will acquire a minority shareholding in Ola, while founder Aggarwal is set to increase his share to further strengthen his involvement in the management and affairs of ANI Technologies, the competition regulator said.

The investment, Ola said in the CCI application, will provide it with necessary financial resources to remain a significant and competitive player in the cab aggregation sector.

Ola saw its revenue plunge 95% during the initial months of Covid-19 lockdown last year. That had forced the company to lay off nearly 1,400 people from its ride, financial services, and food business, it had said in a note to its employees. Aggarwal, in the note, had said the prognosis ahead for the business is “very unclear and uncertain” and the impact of this crisis is “definitely going to be long-drawn”.

Ola, last valued at around $6 billion after its fundraise in 2019 from Steadview capital, saw its valuation slashed by more than half by the U.S.-based investment firm Vanguard Group as of June 2020.

The fresh investment would take the overall funding by Ola to more than $4 billion to date.

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