Indian ride hailing service Ola has raised $1.1 billion in the latest funding round led by Tencent holdings. Tencent Holdings is a Chinese technology company that owns WeChat, an all-purpose app used to send messages, buy products, transfer money, read news, and call taxi cabs.
SoftBank, a Japanese technology investor that invests in Ola, also participated in this funding round. SoftBank may be in a difficult position, considering they are already in final stages of making a large investment in Uber.
Ola announced plans to raise an additional $1 billion, concluding a total raise of $2 billion. Ola is a Bangalore-based company that was founded in 2010 by Bhavish Aggarwal and Ankit Bhati, a pair of IIT Bombay Graduates. Currently, it operates in 110 Indian cities, and its biggest competition is Uber.
Ola had a serious influx of funds in 2016, and the new funding will help Ola along in many ways. The company plans to utilize these funds to improve their supply of cabs, technology, leasing program, and electric car strategy. The timing could not have been any better, considering Uber is currently caught up in a lot of controversies. These funds will provide additional leverage for the company.
Although Uber’s price range is lower in India, Ola has made additional benefits and services available for its customers. They offer Wi-Fi in many of their vehicles, and a year ago they started a premium service for their members that enables customers priority booking and lower prices during peak hours.
“Ola has certainly led the way in terms of service innovation and adding new services for the Indian consumer,” Kartik Hosanagar, a Professor of Technology and Digital Business at the University of Pennsylvania’s Wharton School, told Quartz. “However, it lags in terms of its product experience. The funding will allow it to invest in a better user experience with its app.”