Ola Cabs plays a significant role in Transport Tech funding in India during 2015, raising close to $900M, through 4 deals
Investor activity in the Indian Transport Tech space has been high over the last few years, with Ola Cabs leading the charge. According to Tracxn’s Report on the Transport Tech space – India, the sector has seen an upward trend over the last few years, with 2015 receiving ~$992M in investments. Out of the 31 deals which took place during the year, the most significant came from Ola Cabs which alone raised close to $900M, in 4 deals, during the period.
If we were to take out Ola from 2015’s overall funding we can assume that the remaining 27deals were relatively of smaller volumes, indicating that the number of early stage deals in the sector still account for a large number of the sectors funding.
Ola Cabs also played a significant part of the 2014 funding activity taking home ~252M of the overall $287M~ invested during the year. Taking this into account, it is safe to say that the Indian Transportation Technology space is still in its early stage, with Ola being the one of the very few players which has been witnessing late stage funding, and is driving the market.
If we look deeper into OlaCabs, the startup has indeed played a prominent role towards revolutionizing the face of Indian transportation, seeing an overall funding of $1.2B, and thereby achieving Unicorn status. Ola has attracted investors on a global scale such as Tiger Global, Steadview Capital, Sequoia Capital, Matrix Partners, SoftBank, DST Global, Accel Partners, ABG Capital, Falcon Edge Capital, GIC, Didi-Kuaidi and Baillie Gifford. The Indian startup has been successful in taking on global giant, Uber, in the subcontinent, and by successfully buying out its closest competitor, TaxiForSure, OlaCabs is now focused on being the preferred choice for customers in the subcontinent. Besides, TaxiForSure, OlaCabs has also acquired Intelligent Transportation system company GeoTagg, and Mobile Wallet service ZipCash during 2015. The cab aggregator also took part in the $25M Series C Round of MSwipe Tech.
Ola’s success has been instrumental in encouraging companies to follow its footsteps and we are seeing an upward trend in the number of companies being created on a Y-o-Y basis. Ola’s dominance has also resulted in disruptive innovations such as bike taxis and bus pooling to enter the fray. Regulatory issues, especially concerning bike taxis, continue to be operational barriers to such innovations but bike taxis have already seen investments of up to $2M in 2015. In March 2016, Ola and Uber piloted their bike taxi service in Bangalore city, thereby singling out bike taxis as one of the segments to watch out for in Transport Tech in 2016.
2015 saw a surge in this regard, as 142 companies being founded during this period. The companies coming up in the sector are now moving away from the Cab Aggregator market, which has become relatively saturated with startups such as Meru Cabs, BookMyCab joining Ola. The new startups emerging in the space are now focused towards filling gaps plaguing the market such as heavy traffic conditions by developing solutions towards Car/Bus pooling and Bike taxis, and will be areas of investor interest over the next few years.
For now, the Cabs segment still take in most of the investment with the cab segment seeing the most funding at $1.4b. The segment has seen market consolidation with Ola cabs alone raising $1.2B (85% of the total funding).
The Rentals segment follows with $56M in investments so far, while the bus segment, which is an emerging sector has so far seen $24M in funding.
We have covered the global Transport Tech Landscape in our previous blog which you can read here.
Check out the Transport Tech Report - India here.
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