Ola Electric announced on Thursday that it successfully secured $384.43 million in a recent funding round. Notably, this Bengaluru-based electric vehicle startup, which is distinct from the ride-hailing firm Ola but still shares resources, much to the consternation of many investors, didn’t disclose a significant detail: over $200 million of the newly acquired capital is in the form of debt. As a result, the overall valuation stands at just under $5.5 billion, as revealed by a source familiar with the situation.
Both Ola Electric and Ola, which have a shared communications team, have chosen not to respond to requests for comments on the matter.
The funding round was led by Singapore’s sovereign wealth fund, Temasek, although the official name of the round wasn’t disclosed by Ola Electric. Additionally, the Indian government-backed lender, State Bank of India, provided the debt financing, as confirmed by the startup in its statement.
Ola Electric currently dominates the EV scooter market, boasting a market share of over 30%, as indicated by industry data. Despite a reduction in subsidies, it’s worth noting that most feature-rich electric vehicles (EVs) remain 13-23% more cost-effective than internal combustion engine (ICE) scooters over a five-year ownership period, accounting for the lower resale value of EVs. Furthermore, the Ola S1 Air and X models are even more competitively priced than entry-level motorcycles when considering the total cost of ownership, according to a recent analysis by JP Morgan analysts.
Despite incurring a loss of more than $130 million in the financial year that concluded in March, with revenue totaling around $330 million, Ola Electric has ambitious plans for its newfound capital. The company intends to utilize the funds to expand its EV business and establish what it claims will be “India’s first lithium-ion cell manufacturing facility” in Krishnagiri, a city in the southern state of Tamil Nadu.
Bhavish Aggarwal, the founder and chief executive of Ola Electric, stated, “At Ola, our vision is to end the ICE age in automobiles, and our upcoming Gigafactory will be a significant stride in India’s journey towards becoming a global EV hub. We are committed to developing core EV technologies and manufacturing capabilities, further accelerating the transition to sustainable mobility. We appreciate the unwavering support and encouragement from our investors and lenders who share our vision.”
