In the latest sign of startup momentum in India, Ola said today it has raised $400 million to expand its transportation platform into at least 100 new cities this year in its home country.
Ola provides an app and platform that connect cabs and car rentals with riders and operates exclusively in India. By working with the country’s traditional cab and leasing services, the company is taking a very different approach than Uber, which seeks to recruit drivers who are not licensed taxi drivers to provide rides using their own cars.
While Uber is commonly seen as a global juggernaut after raising almost $3 billion in venture capital over the past year, the company remains in legal limbo in India after one of its drivers was charged with raping a passenger last year.
That uncertainty is a big setback for the company in one of the fastest growing and largest markets for Internet and smartphone users. And that, of course, means there’s a big opening for Ola.
Ola has grown at a remarkable pace, from just 10 cities a year ago to 100 now. While Uber has launched in 11 cities in India, Ola hopes to grow to 200 by the end of the year. Ola is targeting what it considers to be a weak public transportation system, and will now push into many of the country’s smaller cities and less-populate regions.
“Our vision is that people shouldn’t find the need to own a car,” said Bhavish Aggarwal, Ola’s co-founder and chief executive, in a statement. “And we have been able to make this possible for millions of customers in the past four years and creating over a hundred thousand driver entrepreneurs on the platform. With increasing smartphone penetration and immense growth in smaller cities and towns, we will be able to drive the benefits of this on-demand platform deeper into the lives of our customers and partners.”
The last Series E round announced today was led by Russia’s DST Global, but also included funding from GIC, Falcon Edge Capital, plus previous investors such as SoftBank Group, Tiger Global, Steadview Capital and Accel Partners.
Just last month, Ola consolidated its position in India by acquiring rival TaxiForSure for $200 million.