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Ola looks to raise $1 billion; Competitor Uber slashes price to Rs. 6 per km

Ola and Uber have been at war for quite some time now. The app-based taxi hailing space seems to have heated up again as the two giants have started waging another war of deeper pockets in India. On one hand, Ola is all set to raise $1 billion to fend off $3.5 billion investment in Uber India by Saudi Arabia’s Public Investment Fund, and on the other hand, Uber has started offering Rs. 6/km ride with UberGo to take on Ola Micro.

Ola’s round of funding is meant to be closed by the end of July. The expected participants are existing investors SoftBank Sequoia Capital and DST Global are said to be up with or against Didi Kuaidi and two undisclosed participants from the US. Apple had invested $1 billion in Didi in 2013 to help it gain control over the Chinese market and Uber had received funds from Google Ventures. A billion dollar investment to fend off $3.5 billion seems a little far-fetched, but Ola is already the largest aggregator in India.

Flush with funds, the most valuable startup in the world (valued at $68 billion) Uber has slashed prices in Delhi massively to Rs. 6/km from Rs. 8/km. This brings it at par with Ola. The investment from Saudi increases the total funds raised by the company up to $11 billion.

Such a deep pocket has given Uber the ammo to invest massively in India. Delhi, along with Mumbai and Bangalore, is one of the top three markets for these services. Despite their presence across various cities in the country, (Uber is present in 27 cities and Ola in 102) both companies generate about 90% of their business from the top 8-10 cities. Smaller rivals, especially in diversified domains like three-wheeler transport continue to cause a little trouble for the giants in the major metropolitans like Delhi, Mumbai and Bangalore.