So How Much Is Ola Really Worth?

By Leah Meirovich and Assaf Gilad

Ola Cabs, the largest ride-hailing service in India, offers multiple transportation services including regular and luxury car service, auto and bike rental service, rickshaw service, bus shuttle and their most recent offering: ride sharing. The Softbank-backed startup is with a great momentum. The number of drivers has grown significantly, from 10,000 in 2014 to 100,000 in 2015, and last year it counted 200,000 drivers. Ola has stated that it has plans to reach one million drivers on their platform by 2018. Ola is already operating in 100 cities in the sub-continent.

It’s biggest and most significant competitor is, of course, Uber. After merging Uber China into Didi Chuxing the last summer, Uber is hungrier to conquer India, showing the world that hasn’t renounced the whole area. At the end of December 2016, two months after Didi-Uber’s deal, Uber Co-Founder and CEO Travis Kalanick stated outright that he has no desire to invest in or merge with Ola in any way, which seems to indicate that Uber is confident they can overtake or equal Ola’s market share within India. This could spell trouble for Ola since Uber is better funded and has a much larger global presence and name recognition. Uber is quickly rising in India, and their Luxury car service offering is already more attractive than Ola’s.  [Click here for Zirra full spotlight report on Ola]

Search for a company

Due to challenges from Uber, Ola has begun to expand into other avenues of service than simply providing rides, such as OlaCafe, a food on demand service, and OlaMoney, a partnership with YES Bank where customers can press a button for instant cash to be delivered by Ola.

One of Ola’s strengths has been their presence in the smaller towns, in which Uber has stated they are not as interested in. Ola believes its services can have the most impact in these places and is, therefore, seeking to further their presence there.

But Uber is not the sole competitor, albeit the biggest threat. Jet Fleet, a luxury car ride company, is becoming popular and challenges Ola’s luxury car service, and Jugnoo, a rickshaw ride service with $16 million in funding and two acquisitions is presenting an alternative to Ola’s rickshaw service. Meru Cabs is the most popular of the general city cab services within India, and has raised $75 million thus far.

Ola has faced significant problems in the last couple years such as technical issues with their app, molestation of riders by drivers and leakage of personal customer information. It has been riddled with bad press that has affected their image, and has responded by offering free coupons and limited discounted rides among other services in order to keep their clientele from choosing another company, in that way increasing significantly sales and marketing expenditures.

Although Didi is now expanding into Latin America and Lyft will probably expand into Canada,  Ola is currently not interested in expanding overseas. Looking at southeast Asia, the market is already taken by Grab, another Softbank backed company and China is already 100% ruled by the unshakeable king Didi. Didi itself decided just recently to expand for the first time out of China to Latin America. In addition, Ola is locked within the ‘anti-Uber coalition’ a partnership created with Didi, Grab and Lyft, and is expected not to compete with them directly.

So How Much Is Ola Worth? 

Zirra, a company that has developed AI and machine learning technology to effectively analyze the private tech market, has also produced interesting data on Ola. According to the valuation process, based on 85 different data sources, Zirra estimated Ola’s current valuation at $3.7-$3.8 billion. Zirra estimates that within a period of 2-3 years, Ola could go public or be sold for $5.4-$5.5 billion. It is far away from the $68 billion Uber’s valuation (only $52 billion, according to Zirra’s algorithms), but it still keeps Ola inside the prestigious club of the top 20 private tech companies in the world.[Click here for Zirra full spotlight report on Ola]

 

[graphiq id=”axNGfCeMGl7″ title=”Ola Cabs” width=”500″ height=”525″ url=”https://w.graphiq.com/w/axNGfCeMGl7″ link_text=”Graphiq” ]

Search for a company

So How Much Is Grab Taxi Worth?

By Assaf Gilad and Leah Meirovich

While Uber fiercely fought Didi in China and Ola in India, Singapore-based Grab excelled in taking over the entire southeast Asian territory. Despite some Uber presence in the region, Grab, that offers motorbike taxis on demand and access to licensed taxis and limousines, grabbed Singapore, Indonesia, Malaysia, The Philippines, Thailand and Vietnam. It is active now in 34 cities all across the region, claims over 24 million app downloads and more than 500,000 drivers.

Grab’s Total Employee Count (Data: LinkedIn)

But Uber still has plans for Southeast Asia. After the merger with Didi, the ride-hailing behemoth has now much more time and money to invest in the region. Uber has also acquired three other companies during its growth process and has strong operations and user base within the South Asian market.

After Uber finished its business in China, it must show to the world its strength in the rest of Asia. Per The Information, the competition with Uber is about to get tighter. Didi, a potential buyer, said it isn’t interested in extending into southeast Asia.  Uber, on the other side is funded heavily after gaining extra $1 billion from Didi’s merger deal, and is more advanced in its technology. Services such as Uberpool or the autonomous vehicle presented at San Francisco bu Uber is something Grab can only dream about at this stage. According to the news site, Grab’s revenues are estimated at $80-$95 million per year, with a $100 million net loss. The good news is that burn rate has fallen to around $10 million a month. Uber is generating in the region 10%-20% less than Grab, but it’s gaining ground on Grab. Uber subsidizes heavily new drivers and riders. It has also partnered with banks to give car and motorbike loans to drivers that are loyal to Grab and are performing well.

Go-Jek is another rival worth paying attention to. Go-Jek has already made one acquisition and had raised $550 million before being acquired by MVCommerce in October 2016, but as for today, it didn’t expand beyond Indonesia. Indonesia is today’s largest and highest growing economy in Southeast Asia and is also world’s fifth most populated country.

Search for a company

Lyft, (operating in the US), Ola (operating in India), and Didi Chuxing (operating in China) would be typically considered competition, but the three have formed a partnership with Grab which allows each to provide their users with only one app yet access the partner services when traveling to those specific countries, as what is informally known as the ‘anti-Uber coalition’. However, Uber’s merger with Didi has called into question their loyalty to the anti-Uber partnership. If Didi draws back from the partnership now that it has a stake in Uber, it could weigh very heavily on Grab, which is still facing very heavy competition from Uber in their market.

In addition to Lyft and Didi, Grab has created partnerships with the self-driving car nuTonomy, and Tokyo Century, a Japanese leasing company. Also, in December 2016, Honda Motor Company forged a partnership with Grab and stated that it would be investing in Grab. The two companies will still have to figure out the nature of their co-operation, but it seems that they both want Grab to manage a fleet of Honda’s motorbikes in the future.

Two key people have recently joined Grab and are effective in its strategy: CTO Wei Zhu, who was previously a chief Facebook Engineer and the creator of Facebook Connect, and president Ming Maa, a former Softbank executive that is taking over the financial management of Grab and could take it to an IPO in the future.

Zirra, a company that has developed AI and machine learning technology to effectively analyze the private tech market, has also produced interesting data on Grab. According to the valuation process, based on 85 different data sources, Zirra estimated Grab’s current valuation at about $4.1-$4.2 billion. [Click here for the full spotlight report on Grab], higher than the valuation published by the media when reporting in the recent financial round made by Softbank and Honda in September 2016.

Zirra estimates that within a period of 2-3 years, Grab could go public or be sold for $6.3-$6.4 billion. It is far away from the $68 billion Uber’s valuation (only $52 billion, according to Zirra’s algorithms), but it still keeps Grab inside the prestigious club of the top 5 private tech automotive companies in the world.

Search for a company