Microsoft likely invest up to $100 million in Ola's parent company ANI Technology

Microsoft is likely to invest up to USD 50-100 million for stake in Ola's parent company ANI Technology Pvt Ltd, a report in the Livemint said. The move is likely to push the online cab aggregator to switch to Microsoft’s Azure cloud platform from Amazon Web Services (AWS).

Microsoft's move comes at a time when Ola is trying to raise funds after a sharp drop of over USD one billion in its pre-money valuation in September 2015.

Pre-money valuation refers to valuation or asset of a company before any sort of investment or financing.

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Ola's close competition with Uber in India explains its need for massive capital. The competition between the two has increased since Uber Technologies Inc. sold it's Chinese business to Didi Chuxing in August, making India to its top priority.

Since June 2016, Ola has received over Rs 2,345 crore from SoftBank Group Corporation and others in the latest round of funding.

“The talks with Ola are in very early stages. More than the money, it is more about Nadella’s vision of partnering with more and more large technology companies in India and establish Azure as service of preference. Microsoft is likely to invest in Ola but a term sheet is yet to be issued,” a source told Livemint on condition of anonymity.

Lately, Microsoft has been promoting its cloud computing service Microsoft Azure for building, testing, deploying, and managing applications and services in India.

In February, the software giant had announced a strategic cloud partnership with Flipkart, whereby the online retail adopted Azure as its sole public cloud computing platform. In addition, the IT giant also helped Flipkart raise USD 1.4 billion.

The deal seems to benefit both the parties as it would help Microsoft achieve its target to expand Azure's market by grabbing AWS shares in India. At the same time, it would help Ola raise required funds.

Ola's need for funds also stems from the losses incurred due to heavy discounts to customers and drivers. While Ola reported a seven-fold jump in revenue to Rs 758.23 crore, its losses too tripled to Rs 2,313.7 crore in 2016.

The rise in cab-hailing business in India has been in news due to various security concerns.

Earlier this month, a 29-year-old doctor was kidnapped by an Ola driver and his accomplices in Delhi. The doctor was held captive for nearly 14 days before the police rescued him and arrested four of the kidnappers in Uttar Pradesh.

Following several crime incidents including the rape of a woman Uber driver in December 2014, cab-aggregator companies were forced to put in place a system to verify their drivers. Ola even added an SOS button on their app.