The US$1 billion IPO and EV ambitions of India’s ride-sharing company, Ola

The US$1 billion IPO and EV ambitions of India’s ride-sharing company, Ola
Source: Ola’s official website
Now, Ola Electric is in full swing, with the first round of electric scooters being delivered as soon as next month, according to the company’s Chief Marketing Officer Varun Dubey.

What’s Ola?

  • Ola is primarily a ride-sharing company started in 2010 by Bhavish Aggarwal, the company’s chief executive officer, and Ankit Bhati, the company’s chief technology officer.
  • Ola’s ride-sharing service, called Ola Cabs, is based out of India, but it also has a presence in Australia, New Zealand and the United Kingdom.
  • But ride-sharing isn’t the only thing Ola does; it also has an electric vehicle (EV) arm called Ola Electric. It’s a different company altogether, but run by the same people
  • Last year, Ola Electric acquired a Dutch EV company called Etergo, dubbed the “Tesla of the scooter world.”
  • Now, Ola Electric is in full swing, with the first round of electric scooters being delivered as soon as next month, according to the company’s Chief Marketing Officer Varun Dubey.

Electric scooters?

  • Yep, electric scooters. And not those little stand-up electric scooters like Lime or Bird have. These are full-on, riding-through-the-streets-of-Europe style scooters.
  • While the scooters are being delivered next month, customers are able to pre-order their scooter now.
  • In a tweet on September 15, Aggarwal wrote that the company sold “two scooters every second” since the purchase windows opened earlier that morning. He then later tweeted saying that it was now, “4 scooters sold per sec!"
  • And, when it comes to manufacturing these scooters, it seems to be surprisingly easy. See, a regular scooter like this with an internal combustion engine (ICE) has around 2,000 moving parts, compared to the electric scooter version, which only has about 20.
  • And clearly, Ola thinks it’s on to something because they just announced that it would have a 10,000 person crew working at its plant in Tamil Nadu, India, at full-scale capacity.
  • What’s more, the entire crew working at the plant will be female, making it both the world’s largest female-only factory in the world and the only female-only automotive factory in the world.

What was the motivation, though?

  • This decision seems to have been made for two main reasons. First off, the company states that it’s working on creating a more inclusive workforce.
  • “This is the first in a series of initiatives we are undertaking at Ola to create a more inclusive workforce and provide economic opportunities for women across the board. We have invested significantly to train and upskill them in core manufacturing skills, and they will be responsible for the entire production of every vehicle manufactured at Ola FutureFactory," Aggarwal said in a company blog post.
  • But second, experts say that crews of women working on electric vehicles have proved to be more adaptable with the components required for the job. In India, it’s becoming common to hire women to work in these kinds of plants.
  • “Women-run factories are becoming common, especially in the manufacturing of two-wheeled EVs. Women have been found to be more adaptable in the EV manufacturing sector, particularly when it comes to installing power electronics like sensors and motherboards in the assembly operation of EVs, as such jobs require delicate handling of components," said Piyush Chowdhary analyst–smart mobility at CyberMedia Research to Mint.

Is Ola going public?

  • According to Aggarwal, both companies will eventually go public.
  • “We have not publicly announced any IPO plans as of now,” he said to CNBC in late August of this year.
  • “But, both companies in due course will go public. Ola will obviously go public sooner, it’s a more mature business – sometime next year, but we don’t have any final, final date to share with everybody.”
  • And the Ola Cabs IPO seems like it’s going to be as high as US$1 billion.
  • A Reuters report has also said that the company will be working with Citigroup Inc., Kotak Mahindra Bank Ltd. and Morgan Stanley for its fundraising efforts leading up to the IPO, though nothing has been confirmed yet.
  • As for Ola Electric, there isn’t yet any word on when it will be going public.

Will Ola be expanding to any other countries?

  • It isn’t entirely clear, but the company has overseas investors backing them, such as SoftBank Group Corp. from Japan and China’s Tencent Holdings Ltd.
  • The company also already has somewhat of a presence in the US – a research center in Uber’s backyard of San Francisco for its electric mobility and autonomous vehicles.

What’s next?

  • The big question for the future will be whether or not the electric scooter space is one that Ola will stand alone in, and if not, who the competitors will be.
  • As of right now, other ride-sharing companies, like Uber Technologies Inc. or Lyft Inc., haven’t publicly expressed interest in the space, but nothing is set in stone.
  • Additionally, how Ola Cabs’ IPO goes in the coming year could indicate just how much can be expected of Ola Electric going forward and if either of the brands will be branching out to other countries any time soon.
  • Ultimately though, although Ola Cabs currently has over 50% of the Indian market share, the real test will be whether Ola can stand up to the intense competition in other overseas markets and on multiple fronts.

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