We are now bigger in India than Uber in its home country US: Ola CEO Bhavish Aggarwal
Online cab booking service Ola run by Mumbai-based ANI Technologies Pvt Ltd, has acquired Bangalore-based Serendipity Infolabs Pvt Ltd, which runs smaller rival TaxiForSure for $200 million (Rs 1,240 crore) in a cash and stock deal in a major consolidation in the organised cab business in India. Techcircle.in/VCCircle spoke to its co-founder and CEO Bhavish Aggarwal to understand the significance of the deal for the company, investors, etc. Here are edited excerpts:
Why is Ola acquiring TaxiForSure (TFS)?
TFS brings in complementary value on both demand and supply front, especially its business model of working with cab operators on the supply side and focus on economy segment of cab consumers which it has attracted with offerings like Nano, Rs 49 base fares, etc. We also have shared vision for transportation at scale using technology. Importantly, we are growing really fast and an acquisition is an inorganic growth path that accelerates this.
TFS brings in shared vision of transportation needing to be revolutionised in India, different supply and distribution model and focus on economy segment creating complementary value, innovative categories â€“ Nano, autos and a great team.
There is clear synergy in terms of the value that is created. Operational strategies and focus on customer types have also been different. We have grown from a few cars to over 1 lakh vehicles on the platform across 67 cities today. This is clearly a supply-constrained market. What the TFS acquisition will result in is more choice to customers and increased business to driver partners.
Team wise, there are a lot of synergies where going forward, both teams would work together to further revolutionise personal transportation in India. TFS has a great team in place, has executed well and has shown impressive growth in a short span of time.
Is this end of the road for brand TFS?
Everything remains as it is—for customers, drivers and the TFS team. Nothing changes. TFS is a fast growing startup and was in talks to raise its next round of funding as well. However, the deal is good for all stakeholders.
Does Ola plan to acquire any more companies in this space to consolidate?
We are always open to more opportunities, both in the sector as well as for specific synergies like technology, analytics, etc.
Is this a move to pre-empt Uber considering they are looking at India as a prominent market?
It is important to build a local product to solve a local problem and our market leadership has been possible only because of this. The acquisition now gives us the ability to grow the market faster together. To give a sense of scale, in India, we are larger than even Uber is in its base (the US) today.
Since you would have overlaps in several markets, what does it mean for employees?
Both companies are already on a hiring spree; so we don't see any job losses happening. The TFS team already understands the market and this industry well and it's business as usual for it.
We are already a team of about 4,000 and growing fast. TFS has a team of about 1,700.
Arvind Singhal, who was COO, will now lead TaxiForSure as CEO. Both founders will be involved in an advisory capacity for a certain period.
What does this mean for TFS's investors? What kind of a deal has been struck with them?
TFS investors have now rolled over their stock into Ola. However, none of them have joined the Ola board.
TFS works with many cab fleet operators while Ola focuses on drivers who own their own cabs. Will this change post acquisition?
TFS will continue to grow its unique model of working with operators. We see this adding a lot of complementary value to Ola's focus on driver entrepreneurs.
TFS had indicated that it plans to go global? Does Ola have any such vision for itself or the combined entity now?
India is a large market by itself. We have spread to over 67 cities now and intend to be present in over 200 in the coming year. We would be open to evaluating new markets outside of India if we see a potential.
How big are combined operations of Ola and TFS?
We have 70,000 cabs and 30,000 autos on the network in addition to about 15,000 cabs on the TFS network. We can't share data on bookings.
(Edited by Joby Puthuparampil Johnson)