Temasek Tracking - Ola

2010 Founded
2018 Temasek bought US$225m from investors

Valuation is anybody's guess. In a 2019 funding round it was valued at US$7B.

It is a ride-hailing platform with operations in India, Australia, and London which opened recently 2019. It is a rival to Uber, the biggest ride-hailing company in India. In London, it received a boost when competitior Uber lost it's license due to regulatory breaches.

Group comprises :
- ANI Technologies (parent)
- Ola Fleet Technologies -- Cab-leasing business under Ola Cab brand
- Panda Food India -- food delivery company acquired in 2017
- Vogo -- scooter sharing startup  (invested US$100m in 2018)
- Ola Money Postpaid -- mobile platform for credits to Ola riders
- Ola Financial Services -- financial services arm hived off parent company

Ola plans for IPO within 24 months time. On group basis, Ola is still making losses, especially in food delivery and vehicle leasing.

Although it is considered a later stage venture capital funding status, Ola has a mission for a million electric vehicles on the road by 2021. This warrants further excessive funding requirements.

Prospects:
Both Uber and Ola are seeing ridership growth declining drastically. It has reached saturation for point-to-point cab-hailing.  Ola has seen growth of 90% in 2016, 57% in 2018 and 20% in 2018. A lot of it has to do with driver incentive schemes.  In 2019 growth was down to single-digit. The prime reason for the steep decline in growth is due to savage cuts in driver incentives leading to cabbies switching back their previous jobs before they took up Ola-driving.

With its core ride-hailing growth stagnating, Ola is betting on electric mobility, financial services and food delivery through cloud kitchens to drive growth and profitability in the long term.

Temasek investment:
In 2018 Temasek bought single-digit chunk of shares for US$225m. The acquisition was from the secondary market and sellers appeared to be founder members. Again, Temasek invest in lost making company and provide for founders to divest and make hefty gains. It's an investment where the money doe'nt go into the floundering business, but into the pockets of founders who are reducing their risks.

Temasek is also currently negotiating with Ola’s management to invest more money in the cab aggregator by way of subscription to new shares. Media reports claimed that Ola was in discussions with Temasek and other investors to raise about $1 billion.

The core technology is the ride-hailing app. Unlike Uber which is the technology game, Ola is the technology app and a whole host of brick and mortar plays. Life changing technologies is one of Temasek's theme investment target. Is Temasek missing the wood for the trees.

INVESTMENT WATCH:
In the last fund raising in 2019 for US$500M, Ola had no showcase of high revenue growth numbers to pitch. Instead, it positioned itself as a profitable startup, soon to IPO, and lucrative international markets in UK and Australia and niches in India. There were few takers. The shimmer is gone.

No ride-hailing model in the world is making money. They are all burning cash. Ola has extremely ambitious plans for 1 million electric vehicles.  With plans for 1 million electric vehicles, it looks like massive massive funding ahead. Meanwhile, reports suggest the industry has reached saturation point. Having missed out at the startup phase, Temasek looks keen to build up its stake.

Watch out for IPO within 24 months time.

Return to Portfolio Compilation

If you like to see new microblogs of Temasek's troubled assets as and when they are are published, please submit your email in the box on the top, right. Thank you.