SoftBank-backed online cab booking service Ola has acquired its Bangalore-based rival TaxiForSure for $200 million, in a cash and equity deal, as reported in January this year. Following the acquisition, Ola and TaxiForSure are expected to continue operations as independent entities, and TaxiForSure’s investors are expected to roll over their stock into Ola.
TaxiForSure’s current chief operating officer Arvind Singhal will be appointed the new CEO, while co-founders Aprameya Radhakrishna and Raghunandan G are expected to serve in an advisory role for a certain period of time.
Taking on Uber
This deal will increase Ola’s leadership in the rapidly growing transport aggregation segment in the country. The company is currently operational in 67 cities with a fleet of over 1 lakh vehicles. TaxiForSure is operational in 47 cities and has a fleet of about 15,000 vehicles. It’s also likely to give Ola significant edge to compete against the heavily funded Uber, which is currently present in around 11 cities, and had raised a massive $1.2 billion in December last year and had also roped in Baidu as a strategic investor, who apparently had invested an additional $600 million into the company.
Earlier in January, it was indicated that Ola was in talks with another SoftBank-funded GrabTaxi for a global taxi alliance to take on the rival Uber and this alliance was apparently being driven by SoftBank Capital.
It’s worth noting that Uber, Ola and TaxiForSure had their license applications, as per the recently amended Radio Taxi regulations, rejected by the Delhi Transport Department in January. Last month, Uber had been given 7 days to re-submit the application in the correct format or face rejection. TaxiForSure’s application also had several deficiencies, however it’s not clear if they and Ola had also been served similar ultimatums. Last month, the Delhi Transport Department had also started a consultation with the Centre to block the IP address of Uber and shut down its operations in the country if it does not get a radio taxi licence to ply. At the time, Uber had told Medianama that it has submitted the details and documents under the amended Radio taxi regulations.