Ola is preparing to launch its operations in Kathmandu, Paro, Dhaka and Colombo by the fourth quarter of 2017, according to current and former employees with knowledge of the SoftBank-backed company’s activities.
The first city where Ola will launch new operations is going to be Dhaka, the capital city of Bangladesh. Soon after Dhaka, Chittagong, the next major city in the country, is on the to-do list. Colombo, the capital of Sri Lanka will follow Bangladesh. Kathmandu, capital of Nepal and Paro, a major city in Bhutan are going to be the last two in the current round of expansion. Operations in all of these cities are expected to kick off by January 2018 at the latest.
The new international plan comes on the back of a diktat by SoftBank, say senior Ola employees. “Asia has been split into four companies by SoftBank and it wants each of them to own their territories now,” says a senior employee who asked not to be identified as he was not allowed to talk to the press. “Didi Chuxing gets China, Grab is South East Asia, Careem is West Asia and Pakistan and Ola is the sub-continent,” he adds. SoftBank is a major investor in each of these companies.
The Indian subcontinent is an important market for SoftBank. The taxi hailing market in India, according to reports, is set to grow to $7 billion by 2020. Bangladesh, meanwhile, is set to have 34 million affluent consumers by 2025, who are going to be aware of foreign brands. Sri Lanka, meanwhile, has seen 123% growth in mobile phone usage in 2016. All of these users will want to take cabs. And SoftBank wants one of its companies present in that market.
Ola’s expansion, however, seems to be more than just a SoftBank diktat. “Going outside the country has been on the back burner for a while. Ola did not want to do it because it would be resource intensive. But they have hurried up over the last two-three months,” says another employee who did not want to be identified.
There are two reasons for this sudden burst of activity.
- Ola has been chasing Tencent since the last down round, with a view to lead the next round of funding. But this round, employees say, will come on the back of Ola showing ambition that extends beyond India. According to reports, the Chinese company has promised $400 million, which will be delivered to Ola in tranches over a year.
- Employees within the company say that Ola, across all its categories, records about 1.5 million rides a day across 110 cities. But Uber is closing the gap, it records 1.2 million rides a day in 29 cities.
