Self-drive service – Ola – investment $500 million

Self-drive service – Ola – investment $500 million

Self-drive service introduction by Ola is aimed at broadening its portfolio of transportation solution.  Ola to invest $500 million in self-drive service.

The move to enter the self-drive rental service category is in line with Ola’s broader strategy of expanding its bouquet of transport solutions beyond just cabs .  It is planning to include scooters and electric vehicles with a view towards ensuring sustainability and positive unit economics.

Ola to deploy nearly 10,000 cars, including luxury sedans and SUVs, in major cities in the coming months.

Ola cabs :

Ola Cabs is an Indian origin online transportation network company developed by ANI Technologies Pvt. Ltd.  As of December 2018, Ola was valued at about $5.7 billion.  A variety of venture capitalists including Softbank have large stakes in the company.

Ola Cabs was founded on 3 December 2010 as an online cab aggregator in Mumbai and is now based in Bengaluru.  As of 2018, the company has expanded to a network of more than 10,00,000 vehicles across 169 cities. In November 2014, Ola diversified to incorporate auto-rickshaws on a trial basis in Bangalore.  After the trial phase, Ola Auto expanded to other cities like Delhi, Oune, Chennai and Hyderabad starting in December 2014.

In January 2018, Ola extended into its first overseas market to Australia and New Zealand in September 2018.  In March of 2019, Ola began its UK operations introducing Auto Rickshaws in UK.

Investments – ola cabs:

In recent past, Ola confirmed a Rs 650-crore funding from Flipkart co-founder Sachin Bansal.  Steadview Capital and a cohort of US-based investors like Raymond S Cahnman, chairman of Transmarket Group, philanthropists Tina and Steven Price, J3T Ventures and Lyon Assets along with a bunch of Chinese funds also participated in the company’s latest round. 

Ola investment in self drive service :

Homegrown ride-hailing platform Ola will invest over $500 million to launch a ‘self-drive’ service.  This is  aimed at broadening its portfolio of transportation solutions.

The investment will come from a mix of debt and equity over the next couple of years.  Ola will deploy nearly 10,000 vehicles, including luxury sedans and SUVs, in major cities in coming months according to sources.

Ola was likely to raise debt via Ola Fleet Technologies to seed the new business. So far, the multi-modal transport company has relied on equity capital from some of the world’s largest investors like  Japan’s SoftBank and US investment firm Tiger Global, to fund its rapid growth in the country. 

Ola Founders :

Bhavish Aggarwal- is the ola co-founder and Chief-executive-officer who graduated from IIT Bombay with a B. Tech in Computer Science in the year 2008. Bhavish has worked for Microsoft research, Bengaluru  for two years right after college. There, he passed two years with filing 2 patents and 3 research publishing in international journals.

While trying to chase his dream of entrepreneurship, he started an online company to sell short duration tours and holidays online before changing that into Ola Cabs.

Ankit Bhati heads the technical aspects of Ola cabs, ensuring a quick, convenient and instinctive experience for customers and partners. He joined IIT Bombay in 2004 for B.tech in Mechanical Engg and M.Tech in CAD and Automation.

By 2009 he had already worked on several freelance projects and startups like Wilcom, QED42 etc. and finally decided to give up his nomadic professional life for a start-up of his own. He joined the Olacabs journey in November 2010.

The Ola Cab story:

While trying to keep his holiday and tour planning business afloat, Bhavish had to travel from Bengaluru to Bandipur, for which he rented out a car, which ended in a very bad experience.

The driver stopped the car in the middle of the journey and demanded a renegotiation of what Bhavish was paying. After being refused, he proceeded to abandon him enroute his destination.

This is when he realized how his plight was probably similar to a lot of customers across the country who were looking for a quality cab service, but ended up with a one that stood them up, arrived and dropped them off late, didn’t stick to their promises, and came with drivers that were nightmares behind wheels.

This made him see the potential that an extraordinary cab booking service could have, and hence, he changed his business from his earlier start-up to the one we today know as – Ola Cabs. This was in December 2010, where he was joined by his co-founder Ankit Bhati in his start-up journey.

His parents didn’t agree with his idea in the beginning of course, like all parents.  They were thoroughly displeased with his decision to become a ‘travel agent’, but when Ola Cabs received it’s first round of funding from two angel investors, they started to believe in the change he was planning to bring.

Ola to challenge Zoom Car :

Ola cabs, which has become one of the largest cab sharing platforms in India will soon get into the self-drive car business. The brand has decided to enter the new business after investing $500 million in the sector. It will be the first time that Ola will invest in such a business in the Indian market.

The homegrown cab hailing startup recently collected a huge investment from India’s second largest manufacturer – Hyundai and its sister brand and upcoming manufacturer in India – Kia.

Both the Korean brands have together pumped in around Rs. 2,000 crores in Ola and there is investment from Flipkart co-founder Binny Bansal too. The cab-hailing business is also backed by big names like Soft Bank and Tiger Global. The Bengaluru, Karnataka-based company has raised around $3.67 billion till date through various rounds of investments.

Portfolio – Ola cabs – self drive service

Ola is planning to broaden its portfolio with the introduction of the new services. At present,  Ola only offers short distance and inter-state rental cabs. With the introduction of new services, Ola will compete directly with the likes of ZoomCars, Avis, Revv, CarzOnRent and more such brands that currently offer self-driven vehicles in India.

It is clear that  Ola will initially offer the services only in the major cities of the country before expanding to the other cities.

Car rentals by others :

Ola will offer services like long rentals, lease and subscription of the cars. It should be noted that Revv recently started offering subscription-based car ownership in India, which promises to provide vehicles like Mahindra Scorpio, Maruti Ertiga, Hyundai Creta, Mahindra Marazzo, Mahindra XUV 500 and a new car if the customer chooses a plan of more than 12 months. Revv offers popular more.

Self-drive car service in Bengaluru :

Self-driving cars are likely to become a major business in the silicon City in the future. Currently, the option is quite unpopular but it is gaining massive popularity and soon, may see more people choosing the rental car service rather than owning a vehicle.

India is one of the world’s largest car market and it is growing at a fast pace. But, the difficulties like maintenance of the car keeps may prospective buyers away. Self-driven vehicles eliminate the need for such ownership experiences and only focus on the time spent with the vehicle.

 

 

 

Flipkart promoter Binny Bansal quits

Flipkart promoter Binny Bansal quits

Flipkart Promoter and Group CEO Binny Bansal resigned with immediate effect over an allegation of “serious personal misconduct”.

India’s most valuable startup was acquired by Walmart, the world’s largest company by revenue 6 months back.  Walmart bought a 77% stake in Flipkart.

The 36-year-old Binny Bansal quit on 13.10.2018 as Chairman and Group CEO following an independent investigation into an allegation.

Though Walmart has not disclosed the nature of the allegations. Sources say the complaint was filed in July by one of the ex-employees of Flipkart. Following which an inquiry was conducted by an independent law firm at the behest of Flipkart board.

According to reports, a couple of factors forced Binny Bansal to exit his company. To begin with, the allegations were made by a former woman employee of Flipkart in 2016, who had already left the company in 2012. However, the charges could not be substantiated then. It was also around the time Binny Bansal had taken over the role of group CEO from co-founder Sachin Bansal.

In July 2018, the former employee approached Walmart Global that had just announced its 77% acquisition of the company.  According to a report, she wrote to Walmart CEO Doug McMillon about Bansal’s misconduct. Flipkart and Walmart then hired an international law firm to look into the matter. Meanwhile, the Walmart-Flipkart deal was sealed.

Binny Bansal co-founded Flipkart with IITian Sachin Bansal in 2007, denied all the allegations strongly.   He will continue to be a large shareholder in the company and serve as a member of the Board of Directors. Binny’s resignation marks the exit of the co-founder’s of India’s largest e-commerce company.