In order to strengthen its mission to become the leader in the technology led cab aggregation space, Ola (formerly Olacabs), has announced that it has acquired its competitor TaxiForSure for $200 mn in a cash and equity deal. Last month iamWire had published that this deal was likely to close soon, appears that the two companies moved on their discussion swiftly.
Ola has over 1-lakh vehicles on its platform, and has further deepened its footprint with TaxiForSure’s operator led model.
The two companies will continue to operate as separate entities. The leadership and all of the 1700 employees shall continue to work with TaxiForSure, with Arvind Singhal (currently COO) being appointed the CEO. Aprameya Radhakrishna and Raghunandan G, the founders of TaxiForSure, will contribute in an advisory role for a certain period. TaxiForSure is currently in 47 cities with over 15,000 vehicles registered on its platform.
The companies believe that there’s a significant complimentary value that this acquisition adds both on the supply and demand side for Ola and TaxiForSure. TaxiForSure follows a different model of supply and distribution by working with cab operators compared to Ola’s model of working with driver-entrepreneurs. TaxiForSure has also focused heavily on the economy segment of cab consumers with innovative offerings like Tata Nanos as part of their fleet and Rs 49 as base fares in the past. For customers, drivers and operators on the TaxiForSure platform, nothing will change. Customers can continue to book a cab through the app and call centre and drivers will continue to get access to customers on TaxiForSure’s technology platform as always.
Raghunandan G, Co-founder and CEO, TaxiForSure said, “TaxiForSure coming together with Ola will provide us with more opportunity than ever, to do what we do best. Post this acquisition; the combined entity will be strong enough and better capitalized to offer the best value to all our stakeholders, including our customers. This development ensures that industry attractiveness is preserved and the combined entity can race ahead and continue to create unprecedented value for all stakeholders.”
Founded in December 2011, Ola has been funded by Tiger Global, Matrix Partners, Sequoia Capital, Steadview Capital and most recently, Softbank over its four rounds of fund-raising. Investors in June 2011 founded TaxiForSure are Accel Partners, Bessemer Venture Partners and Helion Venture Partners. With this acquisition, investors in TaxiForSure will roll over their stock into Ola.
Will this communion finally threaten US based Uber’s operations in the country, or will it also find a supporting partner?