Ola Electric Mobility has reportedly joined the unicorn club of start-ups. The ride-hailing giant has become the second largest initiative of Bhavish Aggarwal to be valued at more than Rs 6,885 crore.
Ola Electric Mobility raised a fund of about $250 million (Rs 1,722 crore) from SoftBank Group Corp. as part of its Series B round. On Tuesday, Aggarwal celebrated five years of their partnership and praised Masayoshi Son, the founder of SoftBank, on his vision of building electric vehicles for India and the world for the future of humanity.
Celebrating 5 years of strong partnership, looking forward to the years ahead! I’m personally inspired by @masason vision for the future of humanity. Very excited about our partnership to build Mobility & Electric Mobility for India and the world! @SoftBank @Olacabs @OlaElectric pic.twitter.com/JwJDvFKeg4— Bhavish Aggarwal (@bhash) July 2, 2019
SoftBank was allowed to infuse the funds into Ola after the Narendra Modi government asked the companies to electrify their fleet by 2025. Aggarwal, who had been opposing SoftBank's efforts to acquire more stakes in Ola, agreed to the funding by considering the profit margins.
Ola Electric Mobility aims to introduce one million electrified vehicles by 2021. The infused funds will be used for electrification, vehicle testing, and infrastructure for charging batteries.
According to Live Mint, the government's demand for electric vehicles has created a window for the investors to fund the infrastructure for maintenance and charging of the vehicles. It also states that although the upfront cost for the vehicles is high, the variable cost is lowered by 20 per cent, which makes Ola the most attractive proposition for the investors.
Ola Electric Mobility, headed by Anand Shah, was a fully owned ANI Technologies. Tiger Global and Matrix Partners India had infused Rs 400 crore in the company after which ANI Technologies lost its majority share. There are some investments of Ratan Tata in the company as well.
According to the estimates of Prescient and Strategic Intelligence, the electric vehicle's market size will reach a value of about Rs 4,872 crore in 2025 from Rs 490 crore in 2017.