China-based Tencent is reportedly in final stages of discussion to invest around ₹2568 crore in India’s one of the largest cab-hailing startup — Ola. This was first reported by Economic Times, based on four people aware of the development.
One person who is aware of the matter, said to ET, “Tencent executives were in Bangalore last week and they met the Ola management team to discuss the transaction.”
For this new funding round, the company has also held talks with Microsoft to participate in the current round. However, the report suggests that those talks have not yet advanced.
If Microsoft participates in the round, 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 market share in India.
The deal will make Tencent one of the most influential investors in the Indian market, with a total investment of over $1 billion. It recently invested in Flipkart’s $1.4 billion funding round, along with Microsoft and eBay.
Tencent has a history of backing startups that are competing against Uber. It has already backed other taxi app companies like China’s Didi Chuxing and US-based Lyft, besides South-east Asian bike taxi firm Go-Jek.
In November last year, Ola raised $250 million from SoftBank, after which it has kept the funding round open. The funding comes after Ola decided to raise capital at a lower valuation of $3 billion — down from $4.5-5 billion in 2015.
Ola is raising money at a time when it’s San Francisco-based rival Uber has been embroiled in a series of internal challenges, leading to changes in its top management. Uber CEO Travis Kalanick has also resigned from his post.