Uber announced last month it would invest $1 billion (about Rs 6,400 crore) in India over nine months, targeting 1 million rides a day. Earlier this year, it appointed its first India head, Amit Jain, two years after it began operations in the country, its largest market outside the United States.
“Right now, we’re particularly focused on building a great service for hundreds of millions of Indians -and Tata’s leadership and experience will be crucial in helping us meet this important goal,“ Uber CEO Travis Kalanick said. In India, Uber competes with SoftBank-backed Ola, which dominates the domestic online cab aggregation market and is valued at close to $4.5 billion. Ola has raised around $700 million so far and is in advanced talks to raise another $500 million.
In its latest fundraising round, Uber raised about $1 billion, including from Microsoft and the private investment arm of Bennett, Coleman and Company Ltd, the publisher of this newspaper.Uber, which has raised close to $5 billion till date, is now valued at about $51 billion. Baidu also invested an undisclosed sum in Uber in its latest fund-raising round.
Uber and Tata Capital see a lot of synergies in terms of vehicle-financing programmes as well as networking within India to get past regulatory hurdles, experts said. The company, along with Ola, faces regulatory hurdles with some authorities demanding that online cab aggregators ac quire radio-taxi licences that govern fleet operators.
“Tata is a strategic partner for us and we will be leveraging Tata’s businesses to grow faster,“ said Amit Jain, head of Uber India.The Tata fund will not take a board seat in Uber Technologies.
“As an investor, we are not typical venture investor so we look at cash flows and do believe there is a path to profitability for Uber in the near future,“ said Padmanabh Sinha, Managing Partner of Tata Opportunities Fund’s advisory team in India.
Uber in the past three months has rapidly adapted to the Indian market, partnering with autos in Delhi and rolling out cash-payment options for users in six cities. This makes India the only country other than Kenya where Uber does not operate solely on credit card-based payments, helping it expand its reach to users not well-versed with uploading digital cash or adding credit card details on a mobile application.
Uber and Ola have taken different approaches to expansion.While Ola focusses on increasing its presence in small towns and cities, now numbering over 100, Uber prefers to expand deeper in its existing markets.