Bhavish Aggarwal-led Ola Electric valuation tops $5 bn with $200 mn funding

Last October, Ola Electric raised over $200 million, tripling its valuation to $3 billion

Ola Electric, the ride-hailing firm’s electric vehicle (EV) arm, has raised over $200 million from Tekne Private Ventures, Alpine Opportunity Fund, Edelweiss and others. The latest round values the company at $5 billion, an increase from its previous valuation of $3 billion.

In October last year, Ola Electric, raised over $200 million led by Falcon Edge, Softbank and others, tripling its valuation to $3 billion. In July 2019, Ola Electric raised $250 million from Masayoshi Son’s SoftBank. It was just a two-year-old firm at that time. The investment made the fledgling venture a “unicorn”, or a start-up valued at more than $1 billion.

Over the last 12 months, Ola Electric has built the Futurefactory, the world’s largest two-wheeler manufacturing facility, Ola S1.

The two-wheelers are being sold to customers using a direct to consumer model with fully digital purchase. Ola also offers home test rides, doorstep delivery and after-sales service.

In India, Ola’s competitors include electric two-wheeler makers such as Ather Energy, Bounce, Hero Electric, Bajaj, TVS Motor Com­pany and Boom Motors. This recent funding is expected to help Ola Electric compete with rivals.

“Ola Electric is creating India’s EV revolution and is driving cutting edge manufacturing from India for the entire world,” said Bhavish Aggarwal, founder and chief executive officer (CEO), Ola. “With Ola S1, we’ve changed the entire scooter industry and are now looking forward to bringing our innovative products to more two-wheeler categories, including bikes as well as cars. I thank the investors for their support and look forward to partnering with them to take the EV revolution from India to the world.”

Ola Futurefactory, which will employ over 10,000 women at full capacity, will be the world’s largest women-only factory and the only all-women automotive manufacturing facility globally.

This funding is expected to help Ola accelerate development of other vehicle platforms, including electric motorbike, mass market scooter and its electric car. The funding will further strengthen Ola’s ‘Mission Electric’, which urges the industry and consumers to commit to electric and ensure that no petrol two-wheelers should be sold in India after 2025.

India’s electric vehicle market could be worth nearly $206 billion in the coming decade if India were to achieve its 2030 EV ambitions, according to an independent study released by the CEEW Centre for Energy Finance (CEEW-CEF). The report also estimates a cumulative investment need of over $180 billion in vehicle production and charging infrastructure until 2030 to meet the country's EV ambition.

To cater to the growing demand, Ola’s rival Ather Energy has commissioned its second manufacturing facility in Hosur recently, taking its manufacturing capacity to 400,000 units from its current capacity of 120,000 units.

The company has also invested heavily in the charging infrastructure to ensure a seamless and hassle-free transition to EVs.

Another company Bounce, a smart mobility solution company, has plans to raise funding of about $200 million to scale up the operations for its electric vehicle (EV) business.