Hyundai India planning to invest around $250m in Ola Cabs
Korean car major Hyundai India is planning to make a substantial investment in Ola Cabs which is said to be around $250m. If this goes through, the overall valuation of the popular online transportation network company will go over $6 billion. According to a Times of India report, the talks are on the final stages and will be finalized in the next few weeks. With this investment, Hyundai will be picking up a 4 per cent stake in the Bangalore based cab company. Also, this will be the first time that an investment of this size is being made in Ola.
Presently, Ola is working to raise $400-500million. This has seen an investment of Sachin Bansal, co-founder of Flipkart who has invested around Rs 650 crore helping Ola to take on its arch rival, the US based Uber. Both the companies have been battling for leadership in Australia, New Zealand and the UK. It is being said that even Bansal's investment was of the highest order by an individual in Ola to date. Earlier this year, Ola had issues shares worth Rs 150 crore to Bansal which was a part of the company's J round of funding.
The reason on why Hyundai is showing interest in investing in Ola could be its upcoming offering, the Kona EV. The Korean manufacturer would want to least the car through the Ola fleet. Additionally, Hyundai has also mentioned that it plans to electrify its portfolio which means even small cars likes the Grand i10 and others will go through electrification. The TOI report mentions that 7-8 lakh cars are being used on the online cab platform. While in the past 75 thousand to 1 lakh cars were leased by individuals and companies, this trend has seen a decline lately with the addition of transport mediums such as autos.
It is not the first time that an automobile major has shown interest and has invested in one of the new age companies. Some examples are like the Mahindra-Ford deal with ZoomCars, Hero MotoCorp in Ather, Hyundai in Revv and Toyota in Droom.