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[Funding] Ola seeks CCI approval for $500 Mn funding from Temasek and others, “ahead of IPO”

[Funding] Ola seeks CCI approval for $500 Mn funding from Temasek, Warburg Pincus and CEO and Founder, Bhavish Aggarwal, “ahead of IPO”

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Laxitha Mundhra
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[Funding] Ola seeks CCI approval for $500 Mn funding from Temasek and others, “ahead of IPO”

Temasek and an affiliate of Warburg Pincus are investing $500 million in Indian ride-hailing giant Ola, the Bangalore-headquartered startup said in a short statement Friday. Ola co-founder and CEO, Bhavish Aggarwal, is also participating in the new investment, the startup said. This round for Ola comes after 2 years; last time, it raised money in its Series J financing round. Ola said in a statement that the investment comes “ahead of IPO”, which it didn't elaborate on. The company also didn't state the valuation of Ola post this investment. Further, with Bhavish Aggarwal also investing in the round, ahead of IPO, the round most likely is a pre-IPO round and the company may soon announce IPO details.

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“Over the last 12 months, we’ve made our ride-hailing business more robust, resilient and efficient. With strong recovery post lockdown and a shift in consumer preference away from public transportation, we are well-positioned to capitalize on the various urban mobility needs of our customers. I welcome Warburg Pincus and Temasek to Ola and look forward to collaborating with them in our next phase of growth,” said Aggarwal in a statement.

Need for CCI approval?

As per revised thresholds by CCI, any company with

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• > Rs 3,000 crore revenue in India or Rs 6,000 crore globally and/or

• > Rs 1,000 crore worth of assets in India

will have to seek approval from the competition watchdog to raise funds. The $3.5 Bn company has a FutureFactory that values over INR 2400 crores, to produce Electric Scooters. This makes it a mandatory startup to get CCI approval for the funding.

About Ola FutureFactory

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Ola is building its FutureFactory on Industry 4.0 principles. Ola will use its own proprietary AI Engine and tech stack to deeply integrate into all its systems. The company aims the system to continuously self-learn and optimise every aspect of the manufacturing process. This will provide unprecedented control, automation and quality to the entire operations; especially with Ola’s implementation of cyber-physical and advanced IoE systems.

The factory has an initial annual capacity of 2 million units. Thus, Ola’s FutureFactory will create 10,000 jobs and serve as the company’s global manufacturing hub for both India and international markets across Europe, UK, Latin America, Australia and New Zealand. The mega-factory is also expected to be the country’s most automated, with about 5,000 robots and automated guided vehicles in use once the factory is fully operational to its full capacity.

A Timeline of events

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In May 2020. Ola acquired an Amsterdam-based electric scooter startup- Etergo. The scooter’s built, design and efficiency were so impressive that many people call it the Tesla of the scooter world. In May, it had said, “This acquisition will further bolster Ola Electric’s strong engineering and design capabilities with the Etergo team’s extensive vehicle development experience with leading automotive companies like Tesla, General Motors, Ferrari, Jaguar, and BMW. Etergo’s team will continue to be based out of Amsterdam as they join Ola Electric.”

The Electric Scooter
Ola Electric Etergo
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Later, in December, Ola Electric announced that the company had signed an MoU with the Tamil Nadu government for an investment of 2,400 crores in setting up its first factory in the state. Before that, the company had announced its plan to hire over 2,000 people for its electric business as it rapidly built a suite of electric and smart urban mobility solutions for consumers around the world. The company also roped in General Motor Veteran Jose Pinheiro to head its global manufacturing and operations.

In February, Ola announced its partnership with ABB Robots. The former will use robotics and automation solutions for its mega-factory in India to produce its electric scooter. Ola’s scooter mega-factory (Future Factory) will commence operations in the coming months. According to the company, it aims to utilise ABB’s automation solutions for key manufacturing process lines, including its painting and welding lines. Further, it will deploy ABB robots extensively for the battery and motor assembly lines.

Early July, in the run-up to an imminent launch, the Ola Scooter went on a ride on a recent Sunday morning in Bangalore. Ola Chairman and Group CEO Bhavish Aggarwal took the scooter out for a spin. He rode by some of the most iconic spots of the city. “It was such a pleasure taking the Ola Scooter out for a spin and putting it through its paces. Its speed, range, manoeuvrability, ride and handling, and of course its design, and the incredible technology we’ve packed into this – all make it a game-changing vehicle and a beauty to drive. I look forward to bringing this to our customers soon!” said Bhavish Aggarwal, Chairman and Group CEO, Ola.

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