Uber's India Rival Ola Gets $1.1 Billion Funding From Tencent, SoftBank

Uber has many rivals in different countries worldwide, but the two biggest ones are Didi Chuxing from China and Ola from India, and they are steadily gaining ground. In the latest development, Ola has secured $1.1 billion in funding from Chinese investment company Tencent and Japanese finance giant SoftBank.

The ride-hailing service, Ola, revealed to CNBC on Monday that it was in talks with other investors to raise another $1 billion. "The transportation and mobility industries are seeing huge changes globally. Our ambition is to build a globally competitive and futuristic transportation system in India that will support and accelerate a nation on the move. Our new partners share our passion for building the future of transportation in India together and we look forward to learn and benefit from their global perspectives and ecosystems," Bhavish Aggarwal, co-founder and chief executive officer of Ola, told CNBC's Money Control.

Ola now has a valuation of $7 billion, according to the CNBC report that also underlined the U.S. investors would be participating in the second part of the funding round. This might not exactly be reassuring for Uber, which said in 2015 it considered India an important market and was going to invest $1 billion in the country in the coming years.

Ola took off after Uber stepped foot in India in 2013, but since then has expanded the model. It even offers motorbikes and rickshaws for hire in the country, which is considered the world’s biggest developing market for such services. Ola is now present in 110 cities in the country.

Given the new round of funding it has received, the company says that it will now invest heavily in artificial intelligence technology and cover even more areas in the country.

While Uber recently had to shut down its car leasing program in the U.S. due to losses, Ola is expanding its car leasing program in India.

Meanwhile, Uber has been losing ground across the globe since the start of the year. The company was marred by a series of scandals including greyballing the authorities, which culminated in the company’s former CEO Travis Kalanick’s resignation. And the issues haven’t stopped cropping up even after the new chief executive Dara Khosrowshahi too over. The company was recently banned from London, and the new CEO blamed company's ‘bad reputation.’

While Uber attempts to recover under the new CEO, its rivals globally are growing from strength to strength. Its rivals in the U.S., Lyft, is also gaining in terms of funding and partnerships. It recently raised $600 million from General Motors in Series G funding, with whom it has also been partnering for a self-driving program.

However, despite troubles, Uber is expected to file an Initial Public Offering next year.