Bengaluru: Ola Electric announced that it recently secured approximately Rs 3,200 crore in funding from a combination of equity and debt sources. The funding includes investments from marquee investors led by Temasek and project debt from the State Bank of India.
As a result of this funding round, which includes equity investments, the valuation of the Bengaluru-based company has risen to $5.5 billion, up from its previous valuation of $5 billion, according to sources.
These funds are expected to serve as a stepping stone for an initial public offering (IPO), which is anticipated to range between $800 million and $1 billion.
An individual familiar with the company’s strategy stated, “Ola is planning to go public in the near future. The public offering is expected to be one of the largest automotive IPOs in India.” Reports suggest that other investors joining Temasek in this funding round include DIG Investment and Tiger Global Management.
The funds raised will be used to expand Ola’s electric vehicle (EV) business and establish India’s first lithium-ion (Li-ion) cell manufacturing facility in Krishnagiri, Tamil Nadu. These funds will also enable Ola Electric to boost its two-wheeler manufacturing capacity, launch electric motorcycles, and accelerate the construction of the Gigafactory.
Bhavish Aggarwal, the founder and CEO of Ola Electric, expressed, “At Ola, our vision is to end the ICE (internal combustion engine) age in automobiles, and our upcoming Gigafactory will be a big leap in India’s journey towards becoming a global EV hub. We are committed to developing core technologies in EVs and cells and are rapidly scaling up manufacturing to accelerate the transition to sustainable mobility further. Our investors and lenders have shown deep faith in Ola’s vision.”
In the previous year, Ola Electric raised over $200 million from Tekne Private Ventures, Alpine Opportunity Fund, Edelweiss, and other investors, valuing the EV manufacturer at $5 billion. In September 2021, the company raised $200 million in funding led by Falcon Edge Capital, SoftBank, and others, with a valuation of $3 billion.
Ola Electric competes with companies such as Ather Energy, Okinawa Autotech, Ampere EV by Greaves, Hero Electric, and TVS Motor Company. It is also planning to enter the electric car market, putting it in competition with Tata Motors, Mahindra & Mahindra, as well as global giants like Tesla and Hyundai. The company’s significant investments in research and development and cell manufacturing are expected to play a crucial role in the success of its future products.
Notably, Ola Electric was selected as the sole Indian EV company under the government’s ambitious Production-Linked Incentive (PLI)-Advanced Chemistry Cell (ACC) Scheme, with a maximum capacity of 20 gigawatt hours (GWh). The company stated that the PLI-ACC Scheme will play a crucial role in making India self-reliant and localising the most critical aspects of the EV value chain.
Ola is in the process of establishing a Li-ion cell manufacturing facility near its Futurefactory in Krishnagiri. This facility, the first of its kind for Li-ion cell manufacturing in India, will have an initial capacity of 5 GWh in Phase-I, with plans for further scaling up to 100 GWh at full capacity.
Ola has made noteworthy investments in diversifying its product portfolio through innovative advancements in cell technology. The forthcoming Gigafactory in Krishnagiri, expected to become operational early next year, will have the capacity to manufacture cells at scale.
Ola Electric recently expanded its scooter lineup, offering five models with prices ranging from Rs 89,999 to Rs 1.47 lakh. These scooters, unveiled during Ola’s flagship event last month, are built on an advanced Gen2 platform, making them amongst the best choices across various price points in the EV market.
Ola is also preparing to launch its motorcycle lineup by the end of the next year, featuring four models: Diamondhead, Adventure, Roadster, and Cruiser, designed to meet world-class standards.
According to a report by Entrackr, Ola Electric reported operating revenue of Rs 373 crore in the fiscal year 2021-22, a substantial increase from Rs 86 lakh in 2020-21. However, the company also witnessed a fourfold rise in losses, reaching Rs 784 crore in FY22.
In August, Ola Electric continued to dominate the EV two-wheeler segment and maintained its market leadership for a consecutive year. With approximately 19,000 units registered in August, Ola achieved a year-on-year growth of over 400%, compared to the corresponding period in the previous year, maintaining a market share of about 30% during August.
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