Ola Electric Mobility has raised $250 million or Rs 1,725 crore from Japanese investment heavyweight SoftBank valuing the company at close to $1 billion, two people familiar with the matter said. In March, ride hailing app Ola spun off its electric vehicle business into a separate entity.
Ola Electric’s share allotment to Softbank was made on Tuesday, as reflected in a regulatory filing, which was accessed by ET.
It follows a special resolution passed by the Ola Electric board, making SoftBank the single largest investor in the company. “Softbank will end up owning about 22-24% stake in Ola Electric,” said a person requesting anonymity.
While Ola declined to offer comments, Bhavish Aggarwal, cofounder & CEO of Ola tweeted, “I’m personally inspired by Masayoshi Son’s vision for the future of humanity. Very excited about our partnership to build Mobility & Electric Mobility for India and the world,” he said.
Celebrating 5 years of strong partnership, looking forward to the years ahead! I’m personally inspired by @masason… https://t.co/ga0RtKhFTI
— Bhavish Aggarwal (@bhash) 1562061283000
Previously, Ola Electric had raised Rs 400 crore from venture capital fund Matrix Partners, Tiger Global and Ratan Tata. All are existing backers of the ride hailing business Ola, as well.
The push towards electric vehicles comes at a time when Ola’s core business of cab-hailing has slowed considerably as reported by ET. Both Ola and Uber registered a nominal 4% growth in number of rides as these companies cut customer discounts and driver incentives. In comparison, growth rates reached 90% in 2016 and about 60% in 2017.
The Masayoshi Son- led SoftBank is also the largest shareholder in ANI Technologies, which runs Ola’s ride-hailing platform. The Japanese major has stayed away from pumping further capital in the business. Softbank’s stake in ANI is a little under 25%. In December last year, ET reported that SoftBank offered to invest as much as $1 billion in a new financing round for Ola, but Aggarwal had declined to dilute more equity to maintain control of his company.
Currently Ola is running several pilots across the country on EVs. Starting with its Nagpur multimodal experiment launched by the Union Minister Gadkari and Maharashtra chief minister, Devendra Fadnavis, Ola has turned its focus to electric two and three wheelers by building charging infrastructure and swappable battery systems for them.
Last year, Ola said it plans to bring 1 million electric vehicles to Indian roads by 2022. The company is headed by Anand Shah, a former BMW executive, and Ankit Jain, who led Ola’s connected vehicle platform.
Ola is also actively working with the government to recommend battery swapping and quick charge as appropriate technologies to promote electric vehicles mobility in India.
In a report published by Ola on electric mobility the company recommended to the government to support the initiative by allowing corporate ownership of vehicles, easing of permit license, providing dedicated points for pick-up and drop for shared mobility and subsidy for batteries- the highest cost item for an EV.
GOVERNMENT PUSH FOR ELECTRIC MOBILITY
Experts say, electric vehicles will redefine the automotive, energy and mobility industries at their core, in India and globally. In fact the Indian government has been actively pushing for the shift to electric vehicles in its pursuit to bring down oil imports and curb pollution. The intent is to electrify all new vehicles by 2030 and the government is asking auto manufacturers to draw up plans for electrification, in line with its commitment to the Paris Climate Change Treaty.
Globally, governments across China, United States, Denmark and others are incentivising ownership of electric vehicles.