By Gaurav Pradhan
OLA Cabs was raised its valuation to nearly US$ 1 billion (₹ 6100 crore), joining the league of Indian valuable start-ups, making itself into a Billion Dollar Club. Japan’s SoftBank Corp financed the company US$ 210 million. Olacabs started their journey from Mumbai, but now they are functional in Bangalore. It is supported by Sequoia Capital, Steadview Capital in Hong Kong & Tiger Global. Kunal Bahl, co-founder of Snapdeal, has been the angel investor for the company.
Billion Dollar Club – An Achievement
This is a significant achievement for OlaCabs, because this is a company which has not been in Online Retail Domain. This is a signal for other investors as the importance is also getting diverted towards taxi marketplaces, a potential battle place for gaining customers and market share for upcoming aggregators.
Online Retail has grabbed most attention and money so far from investors. OlaCabs’s fundraising has been an indicator of investor’s behavior of putting money on rapid growing business ventures.
This deal has been able to strengthen OlaCabs position in the Taxi Aggregators segment. The resources are already present as it is observed that over 2 million taxis are registered in India and being a market worth US$ 7 billion. Competitors like Taxiforsure, Meru Cabs have already started to feel the heat with this funding. OlaCabs, which do not own any taxi fleet but provide a technological platform for linking taxi owners with passengers. They are expanding rapidly, having presence in 19 cities and having 33000 cars on their radar. Their long term strategy is to gain first time riders from new geographies they enter and gradually increasing their market share. This strategy can be questioned based on the type of industry service they are in. Threat of competition, substitution and high bargaining power of customers can be greater challenges to deal with. But OlaCabs want to gain the early mover advantage with the early adopters, hoping on their delivery of promise due to their resources and capabilities.
This funding is a signal of rise of online platforms to simplify our various daily activities and transactions. But the question remains – How quickly customers are going to accept to it ? Will the numbers be sustainable for the business model to suffice ?
(Author is a Management student of IIM Bangalore having an experience in Manufacturing Industry, Follow On Twitter @GauravToYou)
Also Read :
Olacabs joins Rs 1,000 crore club with new fund-raise – The Times Of India – http://timesofindia.indiatimes.com/business/india-business/Olacabs-joins-Rs-1000-crore-club-with-new-fund-raise/articleshow/38094859.cms
Olacabs raises Rs.250 crore Series C funding from Steadview Capital, Sequoia Capital and existing investors – Yourstory.com – http://yourstory.com/2014/07/olacabs-funding/
Why Walmart is thinking about Online Retail ? – Social Media Trend – https://www.socialmediatrend.in/business/why-walmart-is-thinking-about-online-retail/
IBM and Apple, A US$ 50 Billion Market Partnership: ‘Beauty’ with ‘Brains’ to Rule Enterprise Business – Social Media Trend – https://www.socialmediatrend.in/technology/ibm-and-apple-partnership-beauty-with-brains-to-rule-enterprise-business/
How ‘$ 19 Billion Deal’ is going to play in the Social Media Network: Facebook and WhatsApp – Social Media Trend – https://www.socialmediatrend.in/users/how-19-billion-deal-is-going-to-play-in-the-social-media-network-facebook-and-whatsapp/