Meant to thwart competition from its biggest rival Uber, Ola is looking to utilise the newly-raised funding for making strategic investments in supply, technology, and cutting-edge innovations geared towards meeting the country's unique transportation needs.
Leading cab aggregator Ola on Wednesday said it raised $1.1 billion (Rs 7,150 crore) in latest funding round from venture firms led by Tencent Holdings Ltd, a leading Chinese internet firm. SoftBank, the largest backer of Ola, in its quest to become the dominant power in ride-hailing market globally, has approached Uber to participate in a massive $20 billion funding round. The company has so far raised over $4 billion in funding.
The company is in advanced talks with US -based financial investors for the second tranche, which would also include funds from existing investors, a source close to the company said, declining to be identified as the talks were not yet finalised.
"Our ambition is to build a globally competitive and futuristic transportation system in India", Ola CEO Bhavish Aggarwal said in a statement.
As per the company's spokesperson, Ola is also preparing to making investments in a number of emerging technologies, including AI and machine learning.
But Uber has previously noted how important the Indian market is for the company. "We look forward to helping Ola further develop India's transportation solutions", said Martin Lau, president of Tencent.
The fresh funding will be used to make investments in supply, technology and cutting-edge innovations that will take the company closer to its vision of providing mobility to a billion people.
Uber only operates in about two dozen cities throughout India. "In the long term, Ola will invest in technology, new products to outpace and stay ahead of competition". The ride-hailing company is also spending heavily on a program to buy vehicles and lease them to drivers, and it is experimenting with electric cars in some cities.
The head of Meru Cabs said the company has filed four new complaints with the country's antitrust watchdog, claiming that Uber and Ola are abusing their dominance in four different cities by burning vast sums of investor funds to distort the market. Those include auto-rickshaws and bikes along with cars.