Mumbai based online cab aggregator, Ola, is in talks to acquire its rival company TaxiForSure for about USD 200 million to compete against Uber in the Indian taxi aggregation market. According to people familiar with the deal, Ola will pay cash and offer stock and this acquisition will be the second-largest buyout in the consumer Internet market after Flipkart’s acquisition of fashion portal Myntra for an estimated USD 370 million last year.
As per an ET report, “The term sheet has been signed and in the next 10 days the finer details will be chalked out,” said one of the sources.
Once this acquisition goes through, it will be a significant move in this business of technology led cab service. At the moment no clear leader has emerged in this space. And Uber, which is operating on a global level, is facing such competition from local players in different regions.
Operating since June 2011, TaxiforSure has raised more than USD 60 million till date and also announced that the company is in talks to raise over USD 100 million in its series D round from foreign PE investors and hedge funds with participation from existing investors including Accel Partners and Bessemer Venture Partners.
On the other hand, Ola had raised USD 210 million from Japan’s Softbank Corp in October 2014. It has its services in 50+ cities in the country and now has 60,000 cabs across the country.
After raising USD 1.2 billion series E funding last year at USD 40 billion valuation, US based on-demand car service, Uber had also recently announced that it is reportedly set to raise USD 600 million from Baidu to fuel its growth in China and APAC nations.
With all the VC money pouring into these businesses, it will be hard to see who really wins the consumers in this country.