olacabs-pictureThe Indian ride-hailing app OLA, today, announced that it had raised $1.1 billion in its latest funding rounds led by the Chinese internet company Tencent Holdings Limited. OLA’s existing investor SoftBank, in addition to other new US-based financial investors, were also a part of this round. This round of funding will help OLA keep their arch-rivals Uber technologies at bay in the Indian markets.

On Wednesday, OLA said that the funding of $1.1 billion came in tranches over the last 4-6 months and an additional $1 billion funding is likely to be closed in the coming few weeks. “Tencent Holdings Limited, a leading Internet company in China, will bring significant expertise to Ola as it furthers its leadership position across the mobility market in India,” the firm added.
Ola is planning to make strategic investments in supply, technology, and innovations, intending to go deeper into the Indian market to serve the vast majority of Indians who are looking for affordable and reliable commute and transportation. Ola is currently present in 110 cities across the country with over 14 unique categories to serve the various transportation use cases for India’s 1.3 billion people. These include India-centric classes like auto-rickshaws and bikes, as well as vehicles equipped with the world’s only connected car platform for ridesharing, Ola Play.

Ola’s fund-raiser is the latest in a series of billion-dollar funding rounds in the Indian start-up ecosystem this year, with giants like Flipkart and Paytm having raised massive amounts of capital previously this year. Flipkart leads the charts, having raised at least $2.8 billion in two separate rounds from SoftBank, Tencent, eBay, and Microsoft, while Paytm raised $1.4 billion from SoftBank earlier this year. Being third-most valuable start-up in the country, Ola has been trying to build fresh capital since June 2016. Before this round, it has received at least Rs 2,345 crore from SoftBank Group Corp. Prior to this round, Ola got a pre-money valuation of roughly $3-3.3 billion, a sharp drop from the $4.5 billion valuations it commanded in September 2015. Pre-money refers to the assessment excluding the current round’s cash infusion.

Ola needs massive amounts of capital as it is locked in a bruising battle with the local unit of Uber Technologies, the world’s most valuable and deep-pocketed start-up, which is also in talks to raise funding from SoftBank. After all the turmoil Uber has faced, expansion in the Indian market remains one of the top priorities of the new Uber CEO Dara Khosrowshahi. Ola and Uber currently are locked in a dispute over who controls how much of the market. While Uber claims it is bigger, officials at Ola say that Uber India is not even half the size of Ola. There stands no conclusive way of checking either claim.