Ola Raises $300 M from Hyundai, Kia For Electric Mobility Solutions
Bhavish Aggarwal, Ola cofounder and CEO, poses with Euisun Chung, executive vice chair of Hyundai Motor Group.
Ride-hailing service provider Ola has raised $300 Mn from South Korean auto giant Hyundai and its affiliate Kia Motors to fund a strategic partnership under which the three companies will collaborate to build India-specific electric vehicles and infrastructure.
Indian ride-hailing company Ola, which made its international debut last year, is rapidly doing some serious groundwork for its smart mobility solutions and electric vehicle plans. The company has secured a $300 million investment from Hyundai and Kia to collaborate on building new fleet solutions and explore mobility for global markets.
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Ola said the companies will also work on improving local infrastructure in India and building electric vehicles for the nation, as well as developing solutions to operate and manage fleet vehicles.
Bhavish Aggarwal, cofounder and CEO Ola said, “This partnership will also significantly benefit driver-partners on our platform, as we collaborate with Hyundai to build vehicles and solutions that enable sustainable earnings for millions of them, in the time to come.”
As part of the deal, Hyundai and Kia will provide Ola’s driver partners with customized vehicles and the financial support to lease vehicles and pay in multiple installments. The carmakers will also provide maintenance and repair services for these vehicles. This should help lower the final cost of ownership, said Ola, which has inked similar tie-ups with other carmakers in recent years.
According to Ola, the move will create over 2 million jobs through its mobility ecosystem by 2022. Ola reportedly has over 1.3 million driver partners on its platform.
For Hyundai the move will see it transition from a pure-play automaker to a fleet operator. The three companies said they will accumulate data during Ola’s services operations to improve their vehicles and make changes to their product roadmap.
“Hyundai will proactively respond to market changes and persistently innovate to deliver greater value to our customer.”
“India is the centerpiece of Hyundai Motor Group’s strategy to gain leadership in the global mobility market and our partnership with Ola will certainly accelerate our efforts to transform into a Smart Mobility Solutions Provider,” said Euisun Chung, executive vice chairman of Hyundai Motor Group, said in a joint statement.
Earlier this month, Ola spun out its electric vehicle business, which is now called Ola Electric and has raised $56 million in a round led by two of Ola’s investors.
The $300 Mn funding is said to be part of Ola’s larger ongoing $500 Mn equity financing round, which has also seen the participation of Flipkart cofounder Sachin Bansal and Mirae Asset-Naver Asia Growth Fund. Eight-year-old Ola, which has raised about $3.5 billion in funding from a range of investors, including SoftBank and Tiger Global, is slowly inching toward profitability.
