Indian ride-hailing major Ola plans to invest $500 million to launch a self-drive service venture with an aim to broaden its portfolio of transportation solutions beyond just cabs to include scooters and electric vehicles, The Economic Times reported.
The investment, which will be spread over the next couple of years, will comprise a mix of debt and equity funding. It will also see Ola deploy nearly 10,000 vehicles, including luxury sedans and SUVs, in major cities in coming months, the report added.
“Basis market feedback, we will pilot (the service) in various formats such as rentals, subscription and corporate leasing in select cities in the coming weeks,” an Ola representative told the newspaper.
Ola may route the debt through its wholly owned car leasing subsidiary Ola Fleet Technologies to seed the new business. The new service would be launched in the coming weeks with a focus on top 5-7 markets.
The new venture will put Ola in direct competition with some of the players already operating in the self-drive space, including Myles, Sequoia Capital-backed Zoomcar, and Y Combinator-backed Drivezy.
The development comes almost 10 days after South Korean automakers Hyundai Motor Co. and Kia Motors Corp announced that they are investing $300 million in Ola. According to the agreement, the three companies will collaborate on developing fleet and mobility solutions and building India-specific electric vehicles and infrastructure.
Ola also recently spun out its electric mobility unit, Ola Electric Mobility, which raised Rs400 crore from its early backers Tiger Global, Matrix India, and others last week. The new infusion is expected to help the company meet its goal of launching one million electric vehicles on Indian roads by 2022.
Since its launch in 2011, Ola has raised about $3.8 billion in primary capital from a number of local and global investors, according to Crunchbase. The Bengaluru-based company was reportedly valued at roughly $6 billion during a funding round in February.
Meanwhile, Bengaluru and Silicon Valley-based startup Drivezy has been in talks to raise fresh funding, besides raising another $400 million in asset financing. Zoomcar last raised $3.6 million (Rs 25 crore) in debt funding from Trifecta Capital in August 2018. Prior to that, it had raised $40 million in a Series C funding led by automobile maker Mahindra and Mahindra Ltd in February.
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