Ola Electric, the electric vehicle (EV) subsidiary of the Indian ride-sharing giant, Ola, has made headlines again with its latest funding round. The company successfully secured a hefty sum of Rs 3,200 crore ($385 million) from a blend of equity and debt investments. With Temasek leading the charge, the State Bank of India (SBI) was among the notable participants in this funding exercise.
This funding is earmarked for a grand vision: the expansion of Ola’s electric vehicle initiatives and the establishment of India’s premier lithium-ion cell manufacturing facility. Set to be located in Krishnagiri, Tamil Nadu, this facility represents a significant stride in India’s journey toward sustainable energy and transportation.
Phase-wise Expansion
Ola Electric’s announcement about its new lithium-ion cell facility is causing ripples in the industry. The initial phase boasts a capacity of 5 gigawatt hours. Yet, the company has ambitious plans to scale this up, aiming for a massive 100 gigawatt hours when operating at full throttle. Such capacity not only underscores Ola’s commitment to the EV sector but also positions India as a significant player in the global lithium-ion battery market.
Diversifying the EV Portfolio
The EV market in India is rapidly evolving, and Ola Electric is keen on ensuring it offers a broad spectrum of choices to consumers. Beyond its already popular electric scooters, the company has revealed plans for a motorcycle lineup. These new two-wheelers are set to make their debut by the end of the next year, potentially setting new benchmarks in the EV motorcycle segment.
Investment Patterns & Valuation
In the past months, Ola Electric’s coffers have been brimming, thanks to consistent investment from various financial rounds. This funding journey saw contributions from a diverse set of investors. Alongside Temasek, firms like Blue Investments, DIG Investments, Tiger Global, Tekne Private Ventures, and Ashutosh Vinayak Joshi have pitched in. Their collective contribution stands at an impressive $300 million, a testament to Ola Electric’s potential and the trust it commands in the investment community.
Following this latest round of funding, analytics from TheKredible suggest a bright picture for Ola Electric’s valuation. The company now boasts an approximate figure of Rs 44,410 crore or $5.4 billion. To provide context, this is a substantial leap from its $5 billion valuation from the beginning of the previous year.
Till date, Ola Electric’s fundraising endeavors, spanning equity and debt, have exceeded the $1 billion mark.
Stakeholders & Company Dynamics
Intriguing insights from TheKredible shed light on the stakeholder dynamics within Ola Electric. SoftBank, the Japanese multinational conglomerate, emerges as the dominant external shareholder, commanding a 23.6% stake. Following in the ranks are significant players like Tiger Global and Matrix.
Yet, the lion’s share of the company’s stake remains with its founder and CEO, Bhavish Aggarwal. Before entering the Series E funding round, Aggarwal held a commanding 36.6% of the company, illustrating his substantial influence and belief in the company’s trajectory.
Competition & Financial Health
Ola Electric is not without competitors in the EV arena. Ather Energy, a significant rival, recently secured a funding of $108 million from stalwarts GIC and Hero MotoCorp.
A sneak peek into Ola Electric’s financials from FY22 reveals operating revenues of Rs 373 crore, a dramatic increase from the Rs 0.86 crore in FY21. However, the journey hasn’t been entirely smooth. The company witnessed its losses quadruple due to escalating manufacturing and overhead expenses, culminating in a figure of Rs 784 crore in FY22.
