HYDERABAD: Bengaluru-based Ola, formerly Olacabs, has acquired its rival TaxiForSure in a cash and equity deal for $200 million.
This is the second largest buoyout in the consumer internet market after Flipkart, which bought Myntra for an estimated $300 million last year.
The deal could also spur consolidation among online cab booking service providers in the country. Currently, there are several organised players like BookMyCab, Orange Cabs, Meru Cabs, TaxiGuide and BookCab besides unorganised taxi drivers offering services.
Last month, Uber was reportedly in dialogue with few Indian cab operators for a potential acquisition in order to expand its footprint in the country. Ola’s acquisition of TaxiForSure also confirms investor interest in the rapidly growing online cab booking space.
Following the acquistion, TaxiForSure’s existing investors Accel Partners, Bessemer, Venture Partners and Helion Venture Partners will roll out their stock into Ola, which counts Tiger Global, Matrix Partners, Sequoia Capital, Steadview Capital and most recently, Softbank as its investors.
While TaxiForSure works with cab operators, Ola has a network of over one lakh independent drivers.
All 1,700 employees of TaxiForsure will continue, while Arvind Singhal (currently COO) will takeover as its CEO. Aprameya Radhakrishna and Raghunandan G, founders of TaxiForSure, will contribute in an advisory role for a certain period. Currently, TaxiForSure operates in 47 cities with over 15,000 vehicles registered on its platform. “There’s a lot of complementary value in the strategy TaxiForSure has followed,” said Bhavish Aggarwal, Co-founder & CEO, Ola.
Both firms will continue to operate as separate entities.
“The combined entity will be strong enough and better capitalised 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,” said Raghunandan G, Co-founder and CEO, TaxiForSure.