Uber's Indian rival Ola raises $1.1bn investment to deepen market presence

Ola wins the backing of Tencent and Softbank as it looks to dominate ride-hailing in India

Ola founder Bhavish Aggarwal looks to deepen the presence of his electric cars, rickshaws and small taxis in India (Reuters)

Indian ride-hailing firm Ola has raised $1.1bn in a funding round led by China’s Tencent and Japan’s Softbank and is in further talks to add an extra $1bn from other investors.

Ola says it will use the funding to expand the number of drivers it uses and deepen its presence in India’s ride-hailing market, which is reportedly worth $12bn.

It also plans to invest in artificial intelligence and in-car entertainment facilities which, according to Reuters, will allow riders the choice of steaming music and videos.

Founded in 2011, the startup currently operates in 110 cities across India. Uber, by comparison, operates in 30 cities.

Ola has raised around $1.9bn since 2011, offering bikes, rickshaws and electric cars as part of its ride-hailing options. Ola says that it is developing sustainable transportation solutions in the interest of solving long-term problems around congestion and pollution.

“We are thrilled to have Tencent Holdings join us as new partners in our mission to build mobility for a billion Indians”, said Ola founder and chief executive Bhavish Aggarwal.

“The transportation and mobility industries are seeing huge changes globally. Our ambition is to build a globally competitive and futuristic transportation system in India that will support and accelerate a nation on the move”.

Tencent, one of China’s largest internet firms, has an array of internet and mobile payment subsidiaries that could benefit the Indian ride-hailing firm.

“Ola’s unique local offerings are tailored to India’s burgeoning transportation needs”, said Martin Laud, president of Chinese investor Tencent. “The strategic partnership with Ola makes it possible for Tencent to be part of the fast-growing ride-hailing space in the country.”

Tencent has previously backed Mobike, a Beijing-based bike sharing startup focused on cheap transportation, and German flying-car startup Lillium Aviation.