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How Ola Became India's Leading Cab Aggregator | Ola Story

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Ola needs no introduction. The first Indian cab aggregator company, Ola has made availing of cab services a smooth experience. Owned by ANI Technologies Pvt. Ltd. and formerly known as OlaCabs, Ola was launched in December 2010 by two IIT Bombay graduates. Being a pioneer among the cab companies in India, Ola bridges the gap between cab owners and commuters, and it has done so really well!

Instead of buying and renting out its own cars, Ola partners with a number of taxi drivers and owners and adds a touch of modern technology to the whole setup. This allows people to book cabs at a short notice through Ola's app. Ola is India’s homegrown ride-hailing app with a little less than 50% market share (as of Uber's 2020 report) in India. It has users in over 250 cities of India and employs 2.5 million+ driver-partner

OLA - Company Highlights

  • Startup Name-Ola
  • Headquarte- Bangalore 
  • Founders/Owners-Bhavish Aggarwal and Ankit Bhati
  • Sector-Transportation 
  • Founded-December 2010
  • Revenue-Rs 983.2 crores ($131.83 million) FY21
  • Total Funding-$5 billion+ (February 2022)
  • Valuation-$7.3 billion+ (December 2021)
  • Parent Company-ANI technologies Pvt. Ltd.
  • Website-olacabs.com

Ola - About Ola and How it Works

Ola has simplified the process of cab booking. From easy payment options to keeping the passengers entertained on the go with 'Ola Play', Ola takes care of everything to ensure a smooth ride. Ola now also operates self-drive cars. Be it self-drive or cab-hailing, Ola cabs offer a wide range of cars to choose from depending on the number of travellers, budget, and convenience. For travelling within the city, one can hire shared taxis, autos, bikes, and even e-rickshaws through Ola.

One can opt for ‘Ola outstation’ to travel outside the city and ‘Ola rentals’ to rent a cab on an hourly basis. Ola has also launched ‘Ola select’, a subscription-based membership program that offers premium benefits on rides. 'Ola pedal', Ola’s bicycle-sharing service, is already a big hit in the IIT Kanpur and the IIT Madras campuses with over 500 cycles.

In 2016, Ola launched ‘Ola corporate’. When employees book their rides through Ola corporate, the fare is deducted from the company’s Ola corporate prepaid account. Hence, companies can easily track the travel expenses of their employees while ensuring their safety.

Ola Financial Services (OFS)

Ola has also introduced Ola money. The products offered under Ola money are Ola money credit card, Ola money postpaid, Ola money mobile wallet, and Ola money hospicash. Ola hospicash is a collaboration between Ola and Religare health insurance that allows the policyholders to claim Rs 5000 per day in case of hospitalization. It has further declared that it will invest up to Rs 786.1 crore in this Ola Financial Services subsidiary in December 2021.

Ola operates with transparency. The commission is given to drivers for every sale made. Ola is known to charge far less than many other traditional operators.

Electric Scooters

Ola launched India's first multimodal electric vehicle project on 26 May 2017. The project brought together industry experts and the Indian government to pioneer electric vehicles for the public and promote shared mobility in Nagpur. Established as a separate entity, Ola Electric Mobility Pvt. Ltd. also reached unicorn status with a $250 million investment from SoftBank in July 2019.

After exceeding expectations in the pre-booking round, Ola Electric scooters went live for purchase on their website and via the Ola app from September 15, 2021. The company reportedly sold Rs 1100 crores worth of electric scooters in just 2 days.

Electric Cars

Ola has unveiled its plans to launch its first electric car in the next 2-3 years, as per reports dated July 16, 2022. OLA CEO Bhavish Aggarwal teased and announced that his company is gearing up to build the sportiest car that has ever been built in India. Some concept design ideas have been ready already. The first Ola Electric car is to be launched from its new 4W factory that is to be built and would be another factory, separate from Ola's Futurefactory for 2Ws.

Ola - Industry Details

India’s taxi-hailing market is valued at more than $40 Billion. The market is expected to grow at a CAGR of 6.3% between 2022-2024. The increase is supposed to happen due to the changing lifestyles of travellers and the growing disposable incomes of consumers, especially in Tier-I and Tier-II cities.

Ola - Founders and Team

Ola was founded by Bhavish Aggarwal and Ankit Bhati in 2010.

Bhavish Aggarwal

Ola founder Bhavish Aggarwal graduated from IIT Bombay with a B.Tech in computer science in the year 2008. Ola cabs owner Bhavish worked for Microsoft Research in Bangalore for two years right after college. He filed 2 patents and published 3 research publications in international journals during his stint at Microsoft. While chasing his entrepreneurial dream, he started an online company to sell short-duration tours and holidays before transforming it into Ola Cabs. Bhavish Aggarwal is the Co-founder and the CEO of Ola. Born on 28 August 1985, OLA owner Bhavish Aggarwal's personal net worth was estimated to be around $350 Million, as per 2019 data. The wealth of Bhavish further increased to stand at Rs 7500 crore ($958.43 million) in September 2021, which also made him grab the 9th position among India's wealthiest list under 40, which also features Sachin and Binny Bansal, Neha Narkhede, Nakul Aggarwal and Ritesh Arora, and led by Divyank Turakhia, with Rs 12,500 net worth.

The Ola chief Bhavish Aggarwal will reportedly be stepping down from the day-to-day operations of the core business of Ola and will be more involved with the new and upcoming businesses of the company. The Ola company's day-to-day operations will be taken over by the Arun GR, who has joined in 2021 from Vedanta Resources and has previously headed as the Chief Financial Officer (CFO) of Ola Electric and Ola Financial Services, as confirmed by an internal organisational mail. Bhavish confirmed that he would not be retiring but will move on to overseeing Ola team building, product building, engineering functions, two-wheelers, car projects, quick commerce verticals, international expansion, and more.  

Bhavish Aggarwal is well known for his tweets and remains quite active on Twitter and other social media platforms. He once even remarked jestingly that his tweets receive more replies than even Modiji's tweets.

In a recent tweet that came from Elon Musk, where the Tesla chief said, "Tesla will not put a manufacturing plant in any location where we are not allowed first to sell & service cars", Bhavish Aggarwal sarcastically replied with "Thanks, but no thanks!" the very next day on May 28, 2022.

Bhavish Aggarwal, who has been known to remark on Tesla and its likely launch in India, had said again, according to the July 4th, 2022, that the EV manufacturing giant is free to put up a shop in India and sell its cars, but they are not doing that, further adding that Tesla only "want to be treated differently from others, which I believe is not in the interests of India".    

Ankit Bhati

Ankit Bhati is the Co-founder and the CTO of Ola and heads the technical aspects of Ola Cabs, ensuring a quick, convenient, and instinctive experience for the customers and partners. He joined IIT Bombay in 2004 for a B.Tech in Mechanical Engineering and an M.Tech in CAD and automation. By 2009, he had already worked on several freelance projects and with startups like Wilcom, QED42, etc. Ankit finally decided to give up his nomadic professional life for his own start-up. He became part of the Ola Cabs journey in November 2010. There were speculations that Ankit Bhati has left Ola but these were nothing but rumors and falsities, as said by Ola Co-founder Bhavish.

Ahead of its IPO, Ola Chief Financial Officer (CFO) Swayam Saurabh and Chief Operating Officer (COO) Gaurav Porwal left the company in the first week of October 2021. Arun Sirdeshmukh, who was the CEO of Ola Cars, resigned from the company within less than a year of his appointment. This resignation has been confirmed by Ola CEO Bhavish Aggarwal's tweet, who said, “Arun Sirdeshmukh will move on. Wish him well.” Arun looked after the go-to-market strategy and its used cars business. The task of managing Ola Cars’ day-to-day operations was handed over to CFO, GR Arun Kumar. The Ola Cars business was decided by Ola to be reoriented on June 25, 2022. Shikharr Sood joins the list of Ola resignees. The Ola Head of Talent Acquisition resigned from the firm on July 7, 2022. The Ola work culture is dominated by the "Act fast, think later" philosophy, as mentioned by the top 10 senior employees of Ola who have resigned from the firm.

Ola - Initial Team

After the idea, the design and vision were done by the product manager, Usha Loutongbam, and Bhavish himself. As for the developers who converted these ideas into reality, the first version for Android was built by Ajinkya Potdar and for iOS by Khushal Bokadey. Both of them joined Ola for two months of internship and did an excellent job rolling out the release in real quick time.

The iOS app was then taken over by Atul Manwar and the android version by Ankit Kumar. Neeti Birla developed the backend APIs. The main focus of the new releases was to make the app feature-rich and improve the user experience without losing the essence of one-touch cab booking.

The Ola company currently has somewhere around 6,000 employees, as per recent updates.

Ola - Startup Story | How was Ola Started?

Ola was launched on 3rd December 2010. There is an interesting story behind Ola's start. Born in Ludhiana, Ola owner Bhavish Aggarwal was just like every other success-driven entrepreneur. Bhavish first started an online site named Olatrip.com that offered holiday packages and weekend trips.

While trying to keep his holiday and tour planning business afloat, Bhavish had to travel from Bangalore to Bandipur for which he rented out a car. The cab experience was horrendous! The driver stopped the car in the middle of the journey and demanded a re-negotiation of what Bhavish was paying. After being refused, the driver proceeded to abandon Bhavish en route to his destination.

This is when he realized how his plight was probably similar to a lot of customers across the country who were looking for quality cab services. Bhavish saw the potential of an extraordinary cab booking service, and he changed Olatrip.com's business model to the one we know today as Ola Cabs.

Bhavish on-boarded his co-founder Ankit Bhati for taking Ola Cabs forward. Bhavish's parents didn’t agree with his startup plans in the beginning. They were thoroughly displeased with his decision to become a ‘travel agent’. Nevertheless, his parents became supportive once OLA got its first round of angel investment from Snapdeal founder Kunal Bahl, Rehan yar Khan and Anupam Mittal.

Bhavish believes that anyone can have a good business idea but to implement it successfully, one must have a scalable model to power the business. According to him, the best or one of the safest models one can or should adopt is running a business while owning “zero” inventory.

Ola - Name, Full Form, Tagline, and Logo

If you believe that Ola is some sort of abbreviation or short form, you are wrong. The name is derived from the Spanish word 'Hola' that translates to ‘Hello’.

Ola - Business Model and Revenue Model

Ola has a simple business model. It acts as a facilitator to provide cab-booking services. Customers can book their cabs through the app. Ola does not own any of the cabs. Only those drivers with valid permits duly authorized and verified by transport authorities can sign up with Ola; they could be either self-employed or work for an operator who owns multiple cars.

Just like how we as customers use the Ola app, the drivers get access to a driver-specific mobile app on their smartphone once they register with Ola. This is done only after a thorough check of authenticity and conducting due diligence of the commercial papers and the personal papers of both the driver and the operator. The drivers have the flexibility to decide their own time to log in to the Ola application and accept requests for rides from customers. They may choose to remain logged out of the system as per their convenience. Ola takes a commission of 15% on average on all the bookings done through the app.

Ola considers the following factors to create the final bill for the user:

  • Base Fare - Charged flat
  • Distance Fare - Charged kilometer-wise (different for different cities)
  • Ride Time Fare - Charged on the time taken to travel
  • Peak Pricing - Direct ratio depending on the demand for cabs
  • Service Tax - 5.6%
  • Swachh Bharat Tax - 0.2%
  • Toll Charges - Toll Collection in case you cross toll junctions in the journey

Ola - User Acquisition

Ola has also got into 3 international markets namely Australia, the United Kingdom, and New Zealand. In Australia, it has set up operations in seven cities. It claims to have registered 40,000 drivers on its app in Australia. In India, Ola operates across 250+ cities.

Ola - Funding, Investors and Valuation

Ola has raised total funding of around $5 billion over 29 rounds. This also includes debt financing and the secondary market. The last funding round for OLA came in on December 8, 2021, when the company successfully raised $139 mn from Edelweiss and other investors. This was followed by another funding round dated February 22, 2022, when a clutch of investors including Axis Growth Avenues AIF and Arrow Multi-Asset Fund. The recent Series J funding received by OLA succeeds the mobility giant's approval of the allotment of 66,268 Series J1 preference shares, which is currently fixed at an issue price of Rs 22635 for a single share, which helped the company raise Rs 150 crore, as per the regulatory filings of the company. Here, Axis Growth Avenues AIF has been found to invest in Rs 112.5 crore while Arrow has put in Rs 37.5 crore worth of funds in this tranche.

Ola's valuation reached $6.2 billion in October 2019 when the pandemic hit hard and the nationwide lockdown was announced, Ola, being a ride-sharing company, suffered unimaginable losses. The company's revenues witnessed dropped close to 95% after the large-scale lockdown was announced in India in late March 2020. This brought down the revenues to $3.3 billion as Vanguard marked down the value of its holding. Vanguard Group and T Rowe Price have lowered their revenue in 2019-20, according to the reports.

Ola was last valued at over $7.3 billion, as of December 2021. The Indian mobility unicorn is planning to raise around $500 mn in debt via a Term Loan B (TLB) deal, as per the reports dated November 30, 2021. If the deal fleshes out the Indian mobility unicorn would then be the 3rd Indian startup to have raised a TLB funding round after BYJU's and OYO, which raised $1.2 bn and $660 mn respectively. The company successfully raised the mentioned funds via the TLB round on December 16, 2021. These new funds will be allocated to further steer the company ahead in the mobility industry.  

Ola - Acquisitions and Merger

Ola has acquired 8 organizations in total. The last acquisition of Ola was that of Avail Finance, which is a financial services startup for the blue-collar workforce and led by the Ola chief Bhavish Aggarwal's brother, Ankush Aggarwal. The acquisition of Avail Finance was announced on March 24, 2022, and was finally completed on April 11, 2022, via a share swap deal worth $50 million. The leading cab aggregating giant held a 9% stake in Avail due to its investment in the startup in 2019 before it acquired the company.

GeoSpoc was the previous company that Ola acquired on October 5, 2021. It was the company's first acquisition in a period of over 2 years after it acquired Pikup.ai on August 13, 2019. ANI Technologies, the parent of the ride-hailing major Ola and Ola Electric, completed its acquisition of Foodpanda from Delivery Hero, the Germany-based parent of Foodpanda.

The acquisition of Foodpanda was first announced by Ola in December 2017 for around $200 mn to reinforce its food delivery service. Fast forward to February 5, 2022, the food delivery giant held an extraordinary general meeting where the shareholders of Ola decided to issue 3,793 Series J2 CCPS to Delivery Hero, for Rs 8.5 crore. Mentioning that to acquire 100% of the shares in Foodpanda, the company stated that it will be finally issuing 3,793 Series J2 CCPS to Delivery Hero instead of cash consideration, which will allow the company to acquire 77,10,564 equity shares, which were held by Delivery Hero in Foodpanda, as per the news dated February 24, 2022.

Founded by Ralf Wenzel, Benjamin Bauer and Felix Plog in 2012 in Germany, Foodpanda was a successful business at that time in India, however, due to piling expenses, miscommunication, technical flaws, lack of ownership, lack of a foolproof business, and revenue model, the startup struggled much in India before it finally got acquired by Ola. Foodpanda reportedly pulled in 30,000-35,000 orders per day when it was at its peak of India operations. Furthermore, it launched "The Crave Party" in the last week of August 2018, which rained a range of discounts for the customers, and multiplied the order volumes of the app by 10X in the same year.

FoodPanda Order Spike

Currently, the Foodpanda app lies suspended after the Ola acquisition of FoodPanda.

Ola had acquired the Pune-based geospatial service provider, GeoSpoc in order to improve their location and geospatial technologies with an undisclosed amount. Talking about the acquisition, CEO and Co-Founder, Bhavish Aggarwal mentioned the need for "better, newer maps and geospatial services" for the "new mobility" and to build the future of location services.

The geospatial sector in India has witnessed quite a growth lately, the market of which, in India, is currently valued at Rs 15,000 crores, and is expected to hit Rs 1 Lakh crores by 2029-2030. The company completes its acquisition of GeoSpoc in full for Rs 26 crore, as per the reports dated December 8, 2021.

Ola had already executed an employee stock ownership plan (ESOP), which was worth around $10.5 million (Rs 78.6 crores) for its three former employees and one current executive. Now, the company has further decided to provide ESOP encashment facilities for the former chief executive officer of Ola Foods, Pranay Jivrajka; former chief operating officer of Ola, Pallav Singh; Nimish Joshi, former Vice President, and its current chief product officer, Suvonil Chatterjee.

Among all of them, Jivrajka has emerged as the biggest beneficiary of the ESOP encashment program of Ola with Rs 38.17 crores, who is followed by Pallav Singh, Suvonil Chatterjee, and Nimish Joshi, who possess Rs 24.8 crore, Rs 8.5 crore, and Rs 7.08 crore respectively. Ola declared this development soon after it announced the expansion of its ESOP pool to Rs 3,000 crore. Furthermore, the company also noted that it will have some fresh stocks, worth Rs 400 crore allocated for the employees in the run-up to its IPO. Ola currently boasts of having one of the largest ESOP pools among the late-stage startups of India, which also includes companies like Paytm, OYO, and BYJU'S.

Ola - Future Plans

Ola was initially looking to go public in the first quarter of 2022 and speculations rose that it would likely file its DRHP (Draft Red Herring Prospectus) in the December quarter of the previous year. However, that is past, and the present is that the Ola IPO is delayed, which will either happen towards the end of 2022 or the start of 2023.

The plans of Ola with its subsidiary, Ola Electric seem big as the EV-manufacturing wing of Ola has already started achieving some major feats. Ola is currently focussing more on its cab service and their operations.  

FAQs

Is Ola a Chinese Company?

Ola is an Indian Company but is funded by Chinese investors like Tencent Holdings, Steadview Capital, Sailing Capital,  Eternal Yield International Ltd, and China-Eurasian Economic Co-operation Fund with an estimated investment of $500 million.

Who are the Ola shareholders?

Ola's major shareholders/investors include SoftBank Group (Japanese), Tiger Global (US-based), Tencent (Chinese Venture Capital), Matrix Partners (US-based), and DST Global (Russia).

Which country is Ola from?

Ola Cabs was founded in Mumbai, India.

Who is the founder of Ola Cabs?

Ola was founded by Bhavish Aggarwal and Ankit Bhati in 2010.

What is the full form of OLA?

There is no full form as such. The name is derived from the Spanish word 'Hola' which translates to ‘hello’.

How to become a partner of Ola?

You can easily be a partner of Ola by simply going to www.partners.olacabs.com. There you will find 3 options to become an Ola Partner. You can be an Ola Partner:

  • If you already have a car and you want to attach that car with Ola
  • If you know driving, but lack a car
  • If you have a fleet and you want to attach the same with Ola

When was OLA Electric founded?

Ola Electric was founded in 2017, as a new subsidiary of the Ola company that caters to the new-age, sensible users of electric vehicles.

What is Ola Dash?

Ola Dash was an Ola service that the cab aggregating giant founded in 2015, to provide quick commerce service. However, the service was suspended as per the Ola statements dated June 25, 2022.