Ashwin Mohan and Sunny Sen
The cab-hailing company, Ola, is being valued between $9.5-10 billion in its ongoing funding round where the company will raise $200 million from tech behemoth Microsoft, sources told Moneycontrol.
“What makes Ola interesting for investors is that is a credible rival for Uber, has a larger presence than Uber, and also has deeper play in the electric mobility space,” said one of the two sources.
It has already been reported that Microsoft will acquire nearly five per cent in ANI Technologies (also known as Ola) and also get some stake in Ola Electric, a separate company that aims to build electric infrastructure across the country, if the deal goes through.
Ola and Microsoft did not comment on the valuations. “We have nothing to share on this,” said a Microsoft spokesperson.
Closing the latest funding round was critical for Ola, especially after the Competition Commission of India (CCI) has put a hold on the $300 million investment from Hyundai and Kia. “It is important to be seen as a company that still attracts investors,” said the second source. “Building a startup, scaling it up and getting the right partnerships is also a perception battle startup founders have to play.”
For Microsoft, too, Ola becomes strategic partnership. It is looking at co-developing a connected car platform, according to reports. It also gives Microsoft a dedicated customer for its cloud services, especially Azure, which becomes the base to build all its services. One of the first Indian startups that Microsoft did a strategic partnership with was Flipkart, in 2017. Overtime Flipkart has stopped using Azure and relies on its private cloud. “Microsoft is looking a fixed customers through its investment in startups,” said the first source.
Azure is Microsoft’s a cloud computing service to build, test, deploy and manage applications and services through Microsoft-managed data centers. It competes with Amazon Web Services (AWS) and Google Cloud, and is currently the second largest public cloud provider in the country after AWS.
If Ola has to build a fleet of connected cars, tie-up with Microsoft will be helpful, explained a third source, who did not speak on valuation of Ola. "Microsoft can not just provide cloud storage, it is can also provide artificial intelligent solutions, which will be useful to run a connected car platform," the person said.