Ola to invest $500 million to launch ‘self-drive’ service

Thursday, March 28, 2019

Ola will invest over U.S. dollars 500 million to launch a ‘self-drive’ service. It will help to diversify its transportation solutions. The investment will include a mix of debt and equity. Ola plans to deploy nearly 10,000 vehicles, including luxury sedans and SUVs, in major cities in the coming months. Ola self-drive service will be available in various formats such as rentals, subscription and corporate leasing in select cities in the coming weeks.

So far, the multi-modal transport company has relied on equity capital from some of the world’s largest investors, including Japan’s SoftBank and US investment firm Tiger Global, to fund its rapid growth in the country. The Bengaluru-based company Ola was valued at roughly U.S. dollars 6 billion during a funding round in February. Its bouquet of transport solutions goes beyond just cabs to include scooters and electric vehicles.

The scale of the proposed service will make Ola the largest self-drive car rental company in India. At present, the self-drive sector is highly fragmented with small regional players and some larger players including Myles, Sequoia Capital-backed Zoomcar, and Y Combinator-backed Drivezy.

In the last few years, the company has launched a slew of businesses that generate higher margins such as outstation rentals.

With Ola self-drive business, the intent is to build subscription products for consumers and leasing services for corporate executives through the Ola Corporate offering.

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