Big taxi shakeup in India: Ola completes $200M acquisition of TaxiForSure

Indian taxi aggregator Ola has just announced the acquisition of its homegrown rival TaxiForSure for US$200 million in a cash plus equity deal. As Tech in Asia had reported when the deal was in the making, this consolidation will make it a straight fight in India between Ola and its global rival Uber.

Ola @taxiforsure , welcome on board!

— Ola (@Olacabs) March 2, 2015

According to the now confirmed deal, Ola and TaxiForSure will continue to operate as separate entities. TaxiForSure service and app will still run as usual for customers. Co-founders of TaxiForSure Aprameya Radhakrishna and Raghunandan G will move to an advisory role while Arvind Singhal, currently the chief operating officer of the startup, will move to the CEO role. All the 1,700 employees will continue to work with TaxiForSure.

“Ola and TaxiForSure share the same vision of revolutionizing urban mobility. TaxiForSure has a great team and they have built a very exciting business in a short time. There’s a lot of complementary value in the strategy TaxiForSure has followed,” says Bhavish Aggarwal, co-founder and CEO of Ola.

IIT Bombay alumni Bhavish Aggarwal and Ankit Bhati founded Ola in January 2011. Currently, Ola’s mobile app connects 100,000 vehicles, including cabs and autorickshaws, across 67 Indian cities. TaxiForSure, which took off a few months after Ola, has 15,000 vehicles across 47 cities on its platform.

“TaxiForSure coming together with Ola will provide us with more opportunity than ever to do what we do best. Post this acquisition, the combined entity will be strong enough and better capitalized to offer the best value to all our stakeholders, including our customers. This development ensures that industry attractiveness is preserved and the combined entity can race ahead and continue to create unprecedented value for all stakeholders,” says Raghunandan, TaxiForSure’s co-founder.

Ola had a whopping US$210 million funding round from SoftBank in October on top of the US$41.5 million it had raised earlier in the year, taking its total funding in 2014 to over a quarter of a billion dollars. That gave it ammunition for the TaxiForSure acquisition to compete with global rival Uber which has raised nearly US$5 billion in venture capital and debt financing.

Besides SoftBank, Ola is backed by Tiger Global, Matrix Partners, Sequoia Capital, Steadview Capital. TaxiForSure was backed by Accel Partners, Bessemer Venture Partners, and Helion Venture Partners, who will now – post acquisition – roll over their stock into Ola.

Uber put Ola and other local on-demand taxi services in India under intense
pressure in a price war after entering India in 2013. TaxiForSure found it hard to match the leaders in this battle, so an honorable exit was the best option.

See: After a year of amazing highs and terrible lows, will 2015 bring taxi apps a license to ride in India?