India's Ola raises $500m ahead of IPO

INDIAN ride-hailing firm Ola, backed by Japan's SoftBank Group Corp, said on Friday (9) private equity firms Temasek and Warburg Pincus are investing $500 million in the startup ahead of its planned initial public offering (IPO).

Ola did not give details on its IPO plans but said that it continues to scale up its business across various categories and geographies.

"Over the last 12 months, we have made our ride-hailing business more robust, resilient and efficient. With strong recovery post lockdown and a shift in consumer preference away from public transportation," Chairman and Group Chief Executive Officer Bhavish Aggarwal said in a statement.

Ola was hit hard last year when the pandemic-related lockdowns forced people to stay at home, forcing it to cut about 35 per cent of its workforce and halting 95 per cent of its business.

The company's latest round of funding comes at a time when prominent Indian startups are hitting the public market through IPOs to cash in on a flush of liquidity by foreign funds and the country's new-age retail investors, with 22 companies debuting so far in 2021.

In May, Ola's early investor Matrix Partners India sold a part of its stake for $75 million cash at a valuation of $3-3.5 billion.

Recently, Temasek and Warburg Pincus have been increasing their exposure to technology startups in India.

While New York-based private equity firm Warburg Pincus invested in audio appliances brand boAt earlier this year, Singapore government-owned investment company Temasek has backed education firm Upgrad and online meat delivery startup Licious, among others.