BENGALURU: Homegrown ride-hailing platform Ola will invest over $500 million to launch a ‘self-drive’ service aimed at broadening its portfolio of transportation solutions, according to two people directly aware of the company’s plans.
The investment will come from a mix of debt and equity over the next couple of years, according to one of the persons. Ola will deploy nearly 10,000 vehicles, including luxury sedans and SUVs, in major cities in coming months, said the person.
Confirming the plans to test a self-drive offering, an Ola representative said, “Basis market feedback, we will pilot (the service) in various formats such as rentals, subscription and corporate leasing in select cities in the coming weeks.”
People aware of the company’s plans told ET that Ola was likely to raise debt via Ola Fleet Technologies to seed the new business. 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, which has raised $3.67 billion till date, was valued at roughly $6 billion during a funding round in February.
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Earlier this month, Ola, which competes with American ride-hailing major Uber in India, said it had raised $300 million from Hyundai Motor and Kia Motors, as it looks to collaborate with the South Korean auto majors to build India-specific mobility solutions.
“The (self-drive car rental service) will be launched in the coming weeks with a focus on top 5-7 markets,” a company executive told ET.
The scale of the proposed service will make Ola the largest self-drive car rental company in India. At present, the sector is highly fragmented with small regional players and some larger players including Myles, Sequoia Capital-backed Zoomcar, and Y Combinator-backed Drivezy.