Ola, the domestic ride sharing startup, has finalized $400 million capital investment deal with the Chinese internet conglomerate Tencent valuing the startup at more than $3.8 billion. One of the analysts tracking the sector commented that “The investment has been completed and the understanding is that a sizeable portion will be allotted towards boosting the electric vehicle segment”. Ola could raise additional capital as it has also held talks with US-based hedge funds Coatue Management. Tencent’s investment is part of an ongoing round of financing since November in which it has managed to invest $800 million till now.
The entry of Tencent will help Ola counter the influence of its largest shareholder SoftBank. Earlier this year, the startup also amended its Articles of Association (AoA) to require Soft-Bank to seek approval of Ola’s founders, besides the board, to increase its stake through either primary or secondary share purchases. The increasing interest in Ola among investors comes at a time when rival Uber has been embroiled in a series of internal challenges, which have already led to changes in its top management, with former Expedia CEO Dara Khosrowshahi taking former Uber CEO Travis Kalanick’s place.