In the very first sign of consolidation in India’s cab-summoning app space, India’s largest cab hire service, Ola, acquired its nearest competitor TaxiForSure for $200 million, in a cash and equity deal.
“With this deal Ola, which is already the market leader in the personal transportation space with over 100,000 vehicles on its platform, has deepened its footprint with TaxiForSure’s operator-led model,” Ola said in a note today.
The development is significant in that it comes on the heels of global competitor Uber facing slowed growth following a series of setbacks in India recently, including a rape against one of its drivers and a lawsuit by the victim. Uber’s main rivals including Ola and TaxiForSure have expanded at a furious pace, meanwhile. The acquisition of TaxiForSure further cements Ola’s leadership position and elbows out other Indian rivals like Meru Cabs.
Today’s buy involves a raft of global venture capital investors. Ola is funded among others by Softbank, Tiger Global and Sequoia Capital while TaxiForSure has backing from investors including Accel Partners and Bessemer Ventures.
Ola said the two startups, both Bangalore-based, will continue to operate as separate entities and their services will continue to be available through their respective apps. TaxiForSure currently operates in 47 cities with 15,000 registered vehicles and has 1,700 employees. Ola offers 100,000 vehicles in 67 Indian cities. Last heard, Uber was in 11 Indian cities, its second biggest geographical footprint after the United States. It recentlyslashed fares by as much as 40% across India.
Ola said the acquisition will marry the complementary features of the two top players. TaxiForSure works with cab operators while Ola has a network of driver-entrepreneurs. TaxiForSure has a big focus on the lower end of the cab hire segment. It offers the Nano, the world’s cheapest car, a
nd base fares start as low as 49 rupees (less than $1). But both companies share in common the vision of revolutionizing urban mobility, said Bhavish Aggarwal, the co-founder and CEO of Ola.