Ola raises $50 million from Sailing Capital, CEECF

The country’s largest cab-hailing service, Ola, has raised $50 million from Hong Kong-based Sailing Capital and the China-Eurasian Economic Cooperation Fund (CEECF), according to multiple media reports on Tuesday.

The funding round values the Bengaluru-headquartered firm, which is run by ANI Technologies, at nearly $4.3 billion and is being seen as a part of its steps towards raising fresh funding of $1 billion or more.

With this round, Sailing Capital and CEECF (a Chinese state-backed investment fund), will hold a combined stake of more than 1% in Ola, Mint reported citing regulatory documents filed with the ministry of corporate affairs by Ola.

According to the report, Ola’s valuation has gone up in the latest funding round. Last year, Ola raised $1.1 billion from Tencent Holdings Ltd and existing investor, SoftBank Group Corp, at a valuation of $3.5-4 billion.

Ola’s latest fund-raise comes at a time when it is working aggressively towards substantiating its lead against Uber Technologies in the domestic market and expanding overseas to create a worldwide cab hailing service. It is also building a food delivery business where it competes with the likes of Zomato, UberEats, and Swiggy.

While Ola is still in the process of raising its next round of funding, Mint reported that one of the new investors could include Singapore’s Temasek. In July, Mint reported that Temasek bought shares worth $30 million from Ola employees as part of a secondary share sale.

So far, Ola has raised nearly $2.5 billion and is India’s second-most valuable Internet startup after Paytm. Late last month, Paytm announced that Berkshire Hathaway has invested an undisclosed amount of capital in it.

The debut investment by Berkshire is expected to be $300-350 million for a 3-4% stake, valuing the company at $10-12 billion, according to media reports.

Raising large rounds of funding has almost become a norm in the Indian startup ecosystem, particularly by unicorns (or startups with valuation of over $1 billion). In the country’s highly competitive tech-enables consumer services market, companies need large cash coffers to keep wooing customers, often leading to high cash burn.