BANGALORE, India -- Ola Cabs, India’s top rideshare provider, has acquired smaller rival TaxiForSure in its quest to have a million drivers on its network across India over the next three to five years. Ola Cabs currently has about 100,000 drivers operating cars affiliated to the company.
Mumbai-based ANI Technologies, Ola’s parent company, has agreed to pay $200 million in cash and stock for Bangalore’s TaxiForSure, the startups announced in a press release Monday, confirming months of rumors. The deal adds heft to Ola’s efforts to take on its real competition, Uber Technologies Inc., as Asia’s smartphone boom catalyzes the rise of services across business sectors, from mobile shopping to booking restaurant tables to personal transportation.
Investors betting on these startups have sunk billions of dollars in them, helping them consolidate and scale up operations ahead of the entry of global competitors. Ola’s purchase of TaxiForSure follows a similar but significantly larger merger in China of the country’s top two cab-hailing service providers KuaiDi Dache and DiDi Dache. That deal valued the combined entity at $6 billion, accounting for about 95 percent of China’s ridesharing market.
Ola and TaxiForSure didn’t provide details about their valuation or market share after the deal was announced Monday. Ola has about 100,000 drivers on its network in 67 cities, to which it will add TaxiForSure’s 15,000 drivers. Many of the 47 cities that the smaller company operates in will overlap with Ola’s presence.
Ola has been funded by big names in the venture capital business such as Tiger Global Management and Sequoia Capital, and most recently, SoftBank Corp. over four rounds of fund-raising. Investors in TaxiForSure include Accel Partners, Bessemer Venture Partners and Helion Venture Partners. With this acquisition, investors in TaxiForSure will roll over their stock into Ola, the companies said.
The deal will allow Ola to take on Uber, which suffered a setback in India after a woman passenger alleged she was raped by her Uber cabbie in December, and proceeded to sue the company. Uber has since resumed services in India, and has announced various initiatives to make its passengers feel safer.
On Friday, Ola announced a partnership with India’s largest bank, State Bank of India, to provide automobile loans that drivers could repay on a daily basis, and help the company add a 100,000 drivers to its network over the next two years. In the next three to five years, the company is looking to have a million drivers on its network, the company has said.
The company is also reportedly seeking about $500 million in fresh funding from DST Global -- founded by Russian billionaire Yuri Milner -- which is also an investor in China’s KuaiDi Dache. Milner is already an investor in Ola Cabs in his personal capacity.