Fri. Mar 29th, 2024
Ola Cabs

Microsoft is reportedly planning to invest around ₹320-640 crore in India’s homegrown cab-hailing startup Ola to acquire its minority stake.

If the deal goes through, then the ride-hailing service provider will switch from Amazon Web Services (AWS) to Microsoft Azure Cloud platform. This is a step forward to Satya Nadella’s effort to increase Azure’s marketshare in India.

The deal will also mark Microsoft’s second major startup investment in India. Earlier this year, Microsoft had invested in Flipkart’s $1.4 billion funding round. Flipkart also switched to Microsoft Azure platform with a long-term cloud services deal.

A person aware of the matter said to Mint:

The talks with Ola are in very early stages. More than the money, it is more about Nadella’s vision of partnering with more and more large technology companies in India and establish Azure as service of preference. Microsoft is likely to invest in Ola but a term sheet is yet to be issued.

As per the reports, Ola is currently trying to raise fresh capital. It has so far received ₹2,345 crore from SoftBank Group Corp. and others in the latest round, and is in talks with investors to get more cash.

In its last funding round, Ola got a pre-money valuation of $3-3.3 billion- a sharp drop from the $4.5 billion valuation it commanded in September 2015.

Ola needs huge amount of capital as it is locked in a battle with the local unit of Uber Technologies Inc. – the world’s most valuable start-up with massive funding. After selling-off its Chinese business to Didi Chuxing, succeeding in India has become a top priorities for Uber.

While Uber claims it is bigger than Ola, the executives and investors at Ola claims that Uber is less than half of Ola’s size. There is no conclusive way of checking either claim.

Ola has reported a seven-fold jump in revenue. It reports revenue of ₹758.23 crore in the year ending on 31 March 2016. However, the company’s losses nearly tripled to ₹2,313.7 crore because of heavy discounts and spending on incentives to its drivers.

By Jeet