Livemint: March 23, 2015
Bengaluru: App-based cab-hailing service Ola launched food delivery services on Friday, entering the new business of logistics.
Ola is planning to enter two new businesses, product deliveries and mobile-based navigation technology, tracking similar moves by larger rival Uber Technologies Inc. in the US, Mint reported on 16 March.
Ola dabbled in deliveries of sweets and greeting cards last year, but the company is now planning to generate revenues out of such initiatives that were earlier used only for marketing. Ola on Friday launched a food delivery service called Ola Cafe, which is currently available in a few areas across Delhi, Mumbai, Bengaluru and Hyderabad.
An Ola spokesperson confirmed the launch of the food service but declined to give more details immediately.
The Times of India newspaper reported last month that Ola is in advanced talks to raise $400-$500 million from Russian hedge fund DST Global and other investors. That amount is apart from the Rs.760 crore Ola is raising this month from its existing investors. Investors in the taxi-hiring company also include Orios Venture Partners, venture capital firms Matrix Partners and Sequoia Capital, and Hong Kong-based hedge fund Steadview Capital. Ola, which is promoted by ANI Technologies Pvt. Ltd, needs massive amounts of capital to spend on marketing, discounts and expansion into new cities. The company also needs cash to fund former rival TaxiForSure, which it bought earlier this month for $200 million in a cash-and-stock deal, and for entering the two new businesses this year.
Ola closely monitors moves by San Francisco-based rival Uber, which is already delivering groceries, food and e-commerce products in the US. Uber bought digital mapping start-up deCarta earlier this month in a move that may help the company reduce its dependence on Google Maps.
Last month, Bloomberg reported that Google Inc., which is an investor in Uber, is working on its own cab-sharing app, potentially complicating its relationship with Uber.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.