Ola Electric Mobility is in talks to raise $1 billion from various sources, including financial investors, private equity, and strategic traders, it has been reported. Ola has hired JP Morgan for the job and the investment bank has reportedly reached out to private equity firms and large investors, a report said.
Ola Electric raised $100 million from the state-run Bank of Baroda in July for the first phase of construction of a factory, which the company claimed would be the largest electric two-wheeler manufacturing set-up in the world. It was hailed as the largest long-term debt financing agreement in the Indian EV industry.
“Today’s agreement for long-term debt financing between Ola and Bank of Baroda signals the confidence of the institutional lenders in our plans to build the world’s largest two-wheeler factory in record time,” Bhavish Aggarwal, Chairman and CEO of the Ola group, had said.
Ola Electric Mobility was set up as a fully owned unit of ride-hailing startup Ola in 2017. Subsequently, co-founder Aggarwal bought out a majority stake in the unit from parent ANI Technologies Pvt. Ltd. The company then raised about $250 million from SoftBank Group Corp. and became one of the fastest firms to become a unicorn in 2019. Before the SoftBank round, the company raised ₹400 crore from Tiger Global Management and Matrix Partners India, which, like SoftBank, are large minority investors in Ola’s parent ANI Technologies Pvt. Ltd. In 2020, Ola acquired Amsterdam-based electric scooter maker Etergo, with plans to launch its own version in 2021.
On August 15, Ola Electric unveiled its S1 and S1 Pro electric scooter models, taking on rival startups and established automakers such as Ather Energy, Bajaj Auto and TVS Motors. The company launched the scooters at ₹99,999 for the base variant, while the top variant is priced at ₹1.3 lakh. The first phase of its scooter plant will be operational soon, rolling out 2 million electric scooters annually in the initial phase. The mega factory will serve as Ola’s global manufacturing hub for a range of electric two-wheelers to be sold in India and international markets such as Europe, the UK, Latin America, Australia, and New Zealand.
In a research report last year, India Ratings and Research (Ind-Ra) said that the pandemic is expected to delay the penetration of electric vehicles in the Indian automobile industry, with affordability being one of the major impediments. However, two-wheelers could see faster adoption, along with buses and three-wheelers, while passenger vehicles may take longer.
Categories: Venture Capital