Hitching a ride: After Uber, rival Ola to make Dubai its next pit stop

Ola has for long been on the lookout for a mega round that would help it expand operations not only in India but abroad too
Even as global cab-aggregating giant Uber gives final touches to its mega $3.1-billion deal to buy West Asia’s ride-hailing app Careem, its arch-rival in India, Bengaluru-based Ola, is making plans to enter Dubai.

 

In its quest to take on Uber globally, the Bhavish Aggarwal-led firm is set to make Dubai its next pit stop, it is learnt.

 

According to sources, the company has sent teams to the Gulf state at least twice over the past year to explore the option of adding it to its growing list of markets, said two people with knowledge of Ola’s operations.

 

After Australia, New Zealand, and the UK, this will be its another international market (the fourth).

 

The company is planning to use Amsterdam as a base of operations for its European market once additional funding comes in.

 

“The move is not exactly triggered by the Uber-Careem deal. Ola always wanted to be present in the Gulf because it is an area where the scope for growth after India is a lot. Teams have been assessing Dubai as a starting point for operations.

 

Once that starts they would move to other cities,” said the source.

 

According to people in the know, the ticket sizes in Dubai are bigger and digital literacy is the highest

in West Asia.

“The conversion rate of the dirham to the rupee helps. The high number of Indian expats in the city means marketing the company there will not be a challenge. There are Indian-origin drivers and this means communication would be easier. Back-end costs would be lower,” said a source close to the development.

 

Uber and Careem have standardised the Dubai market, where disposable income is among the highest in the world.

 

Also for Ola, which has been eyeing a $1.5-2 billion funding round, Dubai also opens up a set of investors.

 

Last month, Hyundai Motor Group and Kia Motors together invested $300 million in Ola.

 

The company before that bagged $100 million from Flipkart’s co-founder Sachin Bansal. According to sources, Bansal’s entry as a major investor is expected to instil confidence among investors, present and prospective.

 

In its war with Uber, Ola has for long been on the lookout for a mega round that would help it expand operations not only in India but abroad too.

 

Bansal’s entry would give Ola the mileage it needs to approach investors, which, according to sources, include Chinese cab-aggregating major Didi Chuxing.

 

Last year, it was all about expanding its food discovery and delivery app Foodpanda, in which it allocated close to $200 million; 2019 would be all about going back to investing in its primary business.

 

“The additional funds are for its global expansion. For its mega funding round, it needs to show prospective investors it is a true global Uber rival and not a regional player,” added the source.

 

Recently Ola Electric Mobility, a company backed by Ola, raised Rs 400 crore, put in by several of Ola’s early investors, Tiger Global and Matrix India and others, as part of its first round of investment.


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