It started with a tweet on July 8, 2024, when Ola founder and CEO Bhavish Aggarwal announced the launch of Ola Maps for developers. The CEO also officially announced that Ola Cabs was moving away from Google Maps, the company’s mapping partner until then. 

Incidentally, this came on the heels of Aggarwal’s tussle with Microsoft-owned LinkedIn and the company migrating away from Microsoft’s cloud solution Azure. So the move from Google to Ola Maps naturally attracted a lot of attention on social media. 

Since then, Ola Maps has been in the news for various reasons. 

For one, Aggarwal claimed that Google Maps reduced prices for certain core APIs by up to 70% in response to the Ola Maps launch.

But Developers that use the Google Maps API told Inc42 that Google had already announced a price reduction a few months before Aggarwal tweeted about Ola Maps. “We knew about it for at least a month before the announcement. Google, being a big company, likely planned it further in advance,” said the founder of a route planning and optimisation startup.

Then, Ola was hit by a legal notice from listed mapping major MapmyIndia for alleged data theft and reverse engineering Ola Maps by duplicating MapmyIndia APIs. Soon after, Aggarwal dismissed this notice as being opportunistic. 

But out of nowhere, India’s mapping services space has become a hotbed of competition, controversy and allegations. Ola and Aggarwal are at the centre of this frenzy, and the CEO is supremely confident that Ola Maps will be the next big thing from the house of Ola.  

Sources told Inc42 that the CEO is keen on spinning off Ola Maps as a separate entity and Aggarwal has eyes on creating yet another unicorn, after taking Ola, Ola Electric and most recently Krutrim to the $1 Bn valuation club. 

“A spin-off is on the cards[A few years down the line]; however, at present, the company needs a lot of nurturing from the Ola ecosystem. Once the product nears maturity and the brand achieves a sizable clientele outside the ecosystem, it will be something to look into,” a senior employee working on the platform told Inc42. 

But does Ola Maps even have a shot in this market, where the incumbents have decades of expertise and experience? 

Ola Maps Joins India’s Digital Mapping Frenzy

For the past 18 months, Ola Maps has been developed by Ola Cabs’ parent company ANI Technologies, building on the 2021 acquisition of Pune-based startup GeoSpoc. 

Unlike Ola Krutrim and Ola Electric, which were independent entities from inception and shared the Ola brand name and the company’s resources, Ola Maps is currently part of Ola Cabs’ parent company ANI Technologies.

This is why there is some speculation about Ola spinning off Ola Maps into a separate entity and offering it to developers and other product startups as an API-based service. Aggarwal on X mentioned that Ola Cabs has been spending around INR 100 Cr on third-party mapping services.

It will be interesting to see how Ola differentiates itself from the host of players that make up the mapping market. Although Google Maps and MapmyIndia are the two most dominant players, there are others such as Apple Maps, Dutch giant HERE Technologies, TomTom, MapBox, OpenStreetMaps among others. 

The digital maps and location intelligence services market consists of digital maps services, navigation solutions and telematics for business as well as consumer applications. And most of these companies have products that cater to both B2B and B2C or either of these verticals.  

The opportunity in the digital mapping space is very large. For instance, MapmyIndia’s operating revenue nearly doubled in the past two fiscal years from INR 200 Cr in FY22 to INR 379.4 Cr in FY24.

It is hard to estimate how much Google Maps is earning from India, as the tech giant does not disclose numbers for Google Maps nor its business in India. We do know that most service providers that operate at scale rely on Google Maps.

Swiggy and Zomato, for instance, would be contributing significantly to Google Maps revenue in India, given the millions of orders these platforms process daily for food delivery and quick commerce. Uber India too is a major customer for Google Maps, and Google Maps is pre-installed on millions of Android devices. 

It is hard to fight dominance of this scale, but MapmyIndia has looked to do that through customer acquisition and leading an antitrust battle with Google Maps, as we have written about in the past. 

For context, Google Maps entered the Indian market in 2007, a decade after MapmyIndia’s first product. Last year, MapmyIndia CEO Rohan Verma told Inc42 that MapmyIndia offers a superior product thanks to speed limit indicators, pothole indicators, 3D junction view (for exits and flyovers), several of which are still missing from Google Maps.

However, dethroning Google is no easy task, particularly because of its extensive tech industry network, deep pockets and Android’s dominance in the smartphone market due to which most Android devices come preloaded with Google Maps. 

For MapMyIndia and other majors in the space, it’s the B2B market which includes ride-hailing services, automobile, enterprise solutions, and delivery services that’s been the key addressable market.  

MapMyIndia claims to have captured over 80% of the connected vehicle market, where its apps and devices are installed on-board by the OEM. It also claims to be working with distribution companies, particularly in the food and beverages space. 

So the question is where can Ola even compete in such a market, where two large players already have deep roots. 

Ola’s Maps Journey From 2021

Ola’s journey into the mapping world began after the Indian government changed the guidelines for geospatial data in early 2021. The guidelines restricted foreign companies to a 1-metre accuracy and mandated the use of APIs for such companies from authorised domestic licensees. No such restrictions are applicable for Indian companies. 

The 2021 Guidelines liberalised the entire approach to how an entity could collect the mapping data. Before, it was heavily guarded. And, one needed to have a license and approval from the Indian government to enter the mapping data / streetview data collection.

“This was a major reason why Google could not be directly involved in mapping data collection in India before 2021. Instead, it has had to partner with entities such as Tech Mahindra to collect data for mapping solutions,” a former India-based Google Maps developer told Inc42. 

It was in this India-first milieu that Aggarwal set the roadmap for Ola Maps after the GeoSpoc acquisition. 

Aggarwal’s thesis was that domestic map solutions are critical to democratise access to digital services for all Indians, especially outside the metros. 

He also said that multimodal transportation options such as drones, autonomous vehicles or other new-ge connected vehicles will require more detailed geospatial data, including high-definition and three-dimensional (3D) maps. 

In its first Maps blog, Ola claimed that existing maps do not address challenges such as inaccuracy, inconsistency, varying street names, frequent changes in road networks, non-standardised streets, potholes, and road quality issues. 

Some of these problems are incidentally also MapmyIndia’s USP as Verma told us in January last year. 

But Ola Maps does offer a big upside for Aggarwal and Ola’s many verticals:

1. Cutting Costs: The company will no longer have to spend INR 100 Cr on mapping APIs and SDKs 
2. New Revenue Stream: The in-house mapping solutions is a new revenue stream for Ola 
3. Data Ownership: Ola Maps allows the company to have complete control over user location data, which feeds into other Ola businesses such as ride-hailing, Ola Electric as well as any other verticals launched by the company, including Ola’s recent push into food delivery with ONDC

Of course, competition is beneficial for the entire ecosystem, since this will create a race to offer more features at better prices. 

But building a mapping platform is no easy task. During an interaction with Inc42, a few weeks back, MapmyIndia CEO Verma said, “It is a huge infrastructural task to create a solid foundation of accurate maps based on ground reality for a large country like India (3.2+ Mn sq km to 6.6 Mn sq km!), and then an even more herculean task to maintain and keep the maps updated as the landscape changes.”

According to him, it is very hard to firstly build and maintain maps, and secondly make it into a viable business. “Many players have tried and failed after a few years,” Verma said. 

Ola Maps, which first appeared on the company’s EVs and inside Ola Cabs, is now being offered to developers.

For a moment, let’s put aside the controversy around MapmyIndia’s legal notice to Ola and see how the latter claims to have built Ola Maps.  

As per the company’s statements, it acquired data from Open Street Maps under a licence agreement, as well and from government sources, while also deploying sensors in some Ola Cabs and across the data operations fleet such as cameras, radar, and LiDAR. 

By processing this data, Ola said it developed a suite of APIs and SDKs for B2B use cases. Ola claimed that its maps platform ingested more than 5 Mn messages per second from various sensors and telemetry sources. The petabytes of data is collated, normalised, anonymised, and stored in a data lakehouse. Data streams from various sources are further divided into pipelines to collect relevant data for training AI models, analytics, and data ops for maps. 

The final output is stored in map databases for tiles, places, and routes systems. Ola Electric, meanwhile, has shelved its electric project which was unveiled in 2022, so for now, Ola will instead be relying on its EV two-wheelers and its fleet of cabs for further data collection. 

Suvonil Chatterjee, the chief technology and product officer of Ola Electric, said in a tweet that AI is at the heart of Ola Maps. The company leverages natural language processing for contextual searches, real-time traffic prediction, dynamic routing algorithms, and automated map updates, Chatterjee said. 

What Ola Can Learn From Apple Maps

While the Indian ecosystem has largely applauded the launch, some maps users pointed out bugs and shortcomings such as Ola’s reliance on Google Autocomplete API, routing issues and even about Ola using SDKs from other mapping solutions such as MapBox.

“The APIs offered by Google Maps are simply much more extensive, but the start by Ola Maps is promising. However, with Ola Maps currently being constrained to the Ola ecosystem, most issues are still not public as drivers rarely report them,” according to a founder of location-based services startup.

Moreover, some APIs are difficult to build in terms of accuracy and seamlessness and require multiple datasets to work together. Take for instance, Google Maps’ Places APIs. Industry insiders believe this is especially difficult to develop, because Google relies on high-quality data from Search and other products. This is partly why Google’s Maps APIs are so feature-rich. 

In fact, mapping platforms have transformed into super apps / super platforms incorporating a slew of vertical requirements. Users can directly reserve a table using Google Maps or seek appointments with a doctor or make inquiries about what products a nearby kirana store has in stock. 

MapmyIndia’s consumer app Mappls has partnered with ONDC to incorporate some of these features and more into its products, and the company has also tied up with wearables maker boAt to introduce some features for smartwatches, a category where devices running Google Maps and Apple Maps are typically more expensive than boAt’s smartwatches. 

Apple Maps has also built such features into its APIs but not all of these are available in India. In the US, where Apple is in a much more dominant position, these APIs are more feature-rich. 

What these feature-rich mapping solutions tell us is that mapping apps are no longer just about directions or finding the fastest route between two points. Maps apps are moving towards super apps in some ways. 

Apple’s example is most apt for Ola. Apple Maps was heavily criticised at launch in 2012 for having poor accuracy and mislabelled information. It took the company more than a decade to come close to Google in terms of service quality and features. 

It wasn’t easy for Apple, but having a revenue-generating machine such as the iPhone did help in staying the course. Does Ola have the tenacity that Apple showed? 

For Ola to directly take on Google Maps or Apple Maps, it is critical to add some of these consumer-friendly features, since they can have a snowball effect and bring more B2B customers  on board as well. For Ola Maps, the arduous task begins now. 

Ola Maps might well find itself in the unicorn club if Aggarwal decides to spin it off, but that will still be a valuation game. Dethroning Google, MapmyIndia and even Apple Maps won’t be as simple as going from point A to point B.

[Edited by Nikhil Subramaniam]

The post A Long Road For Ola Maps: Can Bhavish Aggarwal Dethrone Google Maps, MapmyIndia? appeared first on Inc42 Media.

Ola Electric CEO Bhavish Aggarwal has called geotech company MapmyIndia’s move to send a legal notice to the IPO-bound electric vehicle (EV) manufacturer opportunistic.

Addressing media questions at a pre-IPO press conference, Aggarwal said, “We think it is very opportunistic of them given that Ola Electric is not even in the map business. We as a group have three different entities, Ola Cabs, Ola Electric, and Krutim. There are opportunistic players across the board and we will definitely respond to them at the right time.” 

On July 29, MapmyIndia’s parent entity CE Info Systems accused Ola Electric of illicitly copying its data to build its recently launched Ola Maps interface. The company sent a legal notice to Ola Electric for co-mingling and reverse engineering its licensed product.

Ola Electric then called the allegations “false, malicious and misleading”. “We would like to state unequivocally that these allegations are false, malicious and misleading. Ola Electric stands by the integrity of its business practices. We will suitably respond to the notice shortly,” a company spokesperson said. 

It is pertinent to note that the two warring companies inked an agreement in June 2021, which gave Ola Electric the licence to use MapmyIndia’s data . 

Ola Electric’s Attractive IPO Pricing

Meanwhile, Ola Electric is set to make its public market debut. The company’s IPO will open on August 2 and close on August 6. The EV maker has set a price band of INR 72-76 per equity share for the public offer via which it is aiming to raise over INR 6,145.6 Cr at the upper end of the price band.

On the pricing of the public offer, Aggarwal said that the company has a very big opportunity to grow and it wanted to keep the pricing attractive. 

“Ola Electric is essentially an India story and we wanted the Indian investor community to be part of the story. We want their partnership, we want their support, and we also want them to also create wealth for themselves… We wanted to price it so that the investor community feels excited about it,” he said. 

However, the company is looking for a listing at a time when its losses are widening. For the financial year 2023-24 (FY24), Ola Electric’s net loss widened 7.6% to INR 1,584.4 Cr from INR 1,472.1 Cr in the previous year.

While its topline surged over 90% to INR 5,009.8 Cr in the fiscal, its total expenses also shot up over 60% to INR 6,277.4 Cr from INR 3,883.4 Cr in the previous year.

A majority of its burn is attributed to the jump of over 75% in the cost of materials consumed, which stood at INR 4,390.9 Cr during the year under review from INR 2,504.8 Cr in FY23.

Ola Electric’s Dependency On China

As per the RHP, Ola Electric’s imported supplies accounted for 37.03% (a majority of it from China) of the cost of materials consumed in FY24 as against 31.11% in FY23. Meanwhile, domestic supplies comprised 62.97% of the cost of materials consumed in FY24 as compared to 68.89% the previous year.

Addressing a question on the dependence on China, Aggarwal said he anticipates the dependence on China to reduce in the long term. Breaking the process of building electric batteries into three parts, he said that the majority of the company’s dependence on China is for processing raw materials to build cell components (midstream process). 

He said that the company is currently looking to bring the process of assembly of the battery cells, the “Level I” of battery manufacturing, in India via its Gigafactory. Post that, he said that the company plans to bring the midstream process to the home soil as well. 

Aggarwal also lauded the government’s decision to quash custom duties on the import of key minerals required for EV battery manufacturing. He said that the move will benefit the company’s push to Indianise battery production.

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Just a few weeks ago, social media was abuzz about Zomato and Swiggy, but most users didn’t have good things to say. The debate was about platform fees — rising from INR 1 per order in August last year to INR 6 in July 2024 — and how this has weakened the food delivery proposition. 

But platform fees are only going to rise in the future. This is the price that consumers have to pay to get the convenience of food and quick commerce deliveries. And with no real competition in sight, Zomato and Swiggy pretty much follow each other’s moves when it comes to pricing.

We have seen the likes of Amazon, Uber Eats and Ola try to disrupt the duopoly, but Swiggy and Zomato continue to all-but split the food delivery market. The others just couldn’t expand beyond Bengaluru and other top cities, while keeping up with the discounts that Swiggy, Zomato offered. 

But now, things might be changing. Large players such as Ola and Paytm are increasingly leaning on the Open Network For Digital Commerce (ONDC) to gain ground and disrupt Zomato and Swiggy with more attractive pricing. 

To be clear, this is a battle that’s largely being fought on pricing thus far. ONDC-backed food delivery players such as Ola or Paytm do not have the operational expertise nor the resources to pull off food delivery on a consistent basis. In particular, Ola has leveraged ONDC to quickly mount a challenge, and take another shot at food delivery after its past failures. 

In other words, ONDC has opened the doors to competition for Swiggy and Zomato. But can Ola and others banking on ONDC truly outpace Zomato and Swiggy? 

Ola Dreams Food Delivery Again

Ola founder Bhavish Aggarwal has a fascination with food delivery. The company has attempted food delivery thrice through the Ola app, before the latest ONDC tryst.

When Ola and Aggarwal first experimented with food delivery through Ola Cafe in 2015, the idea was to build an instant delivery model through a restaurant network.

Unlike Zomato or Swiggy, which allowed consumers to browse through the entire menu of a restaurant, Ola limited itself to select few items from a handful of restaurants in the consumer’s vicinity. The company banked on its fleet for delivery, but the differentiated product did not go down well with consumers, and Ola Cafe was shut down within a year.

For act two, Ola acquired Berlin-based FoodPanda from Delivery Hero for $50 Mn in 2017, to again take on Swiggy, Zomato, as well as Uber Eats (eventually acquired by Zomato). The company wanted to replicate Uber Eats’ early success in India at the time, but once again, Ola fell short of the mark when it comes to user experience on Ola FoodPanda.

In 2022, Ola moved away from the restaurant aggregator model, and looked to leverage cloud kitchens to enter the space. Here, it was looking to emulate the likes of Rebel Foods, CureFoods, Box8, among others. Even though Ola put cofounder Pranav Jivrajka in place to lead this vertical, the business proved tough to scale up. Jivrajka quit the company just before the Ola’s third attempt failed.

But this time around, the company is hoping that ONDC will help it achieve its food delivery dreams, starting with Bengaluru. The company is also building a delivery fleet with EV bikes to improve the user experience, which was severely lacking in previous attempts. 

According to ONDC seller apps such as Magicpin and uEngage, which bring restaurants on board, Ola has seen good user traction on account of efficient operations and in-house logistics.

“Food delivery orders work on crucial delivery timelines which is why if a company has been in the business for many years, it will have better efficiencies as it can manage sensitive peak hours, will have prior experience of tie-ups with restaurants,” owner of a Bengaluru-based cafe told Inc42. 

In Ola’s case, a number of cloud kitchen brands and other infrastructure it was running until 2022 is likely to come in handy as it begins to scale operations to the other states. But it will not be easy to compete with juggernauts such as Swiggy and Zomato. 

Swiggy is on the verge of an IPO to raise cash before expanding further, and Zomato is cash rich after its profitable stint in FY24. Given these developments, how far will Ola’s discounts-heavy play work? 

Can Ola-ONDC Eat Into Zomato, Swiggy Share? 

There is one advantage to Ola’s strategy of offering high discounts through ONDC. It expands the base of food delivery consumers who are wary of the higher prices and extraneous fees on Zomato and Swiggy. This means Ola can attract customers who were either on the food delivery fence or who have abandoned the two primary apps. 

“Competitors like Zomato and Swiggy have entirely different business ambitions now compared to 2022. They aren’t looking to burn cash anymore which will definitely give more room to Ola to acquire more users through better user experience and discounts,” uEngage founder Sameer Sharma said. 

Sources told Inc42 that Ola’s Aggarwal is feeling bullish about eating away at market share by offering heavy discounts. In fact, Ola has also reduced take-rates from restaurants by 50% in comparison to Zomato and Swiggy, which has at least worked out in Bengaluru.

“When Ola begins charging delivery fees, it will be still another revenue source for the company. I think Bhavish is fully prepared to do the heavy lifting for ONDC in the food delivery space this time,” the source quoted above said.

Ola’s discounts in food delivery as per Inc42’s analysis are staggering. Ola is offering 70-80% cheaper food delivery than Swiggy, Zomato and even other ONDC buyer apps like Paytm or Magicpin.

In fact, sources tell us that Ola is also providing free deliveries for every order, which has doubled its order volumes in the past couple of months. 

Susmit Patodia, associate partner at early-stage venture capital firm Antler, believes that ONDC cannot dictate the pricing or discounts even though that was the case during the first two years. Now it’s left entirely up to the participants to decide the pricing for every order. 

Bengaluru-headquartered Antler has built a thesis around investing in startups that are building on the ONDC protocol. “We need to reinforce the idea that ONDC is an open protocol where the network participants will play a huge role in the price determination, the waiver of delivery charges. This includes even the merchants or sellers who are now realising that ONDC is a viable option,” Patodia said.

He added that although ONDC has taken giant steps in the initial years, and that cash burn is not a big problem for the moment. “The ecommerce giants have grown and scaled up after burning cash for about 5-7 years, including Zomato and Swiggy. The total cash burn under the ONDC model is not comparable to that, at the moment,” Antler’s associate partner added.

In both cases the idea is the same: get consumers habituated to ordering online, and gradually taper down the discounts. The big question is can Ola even scale up to the extent where it can take its foot off the discounts pedal? 

For that, it needs to build the leadership and the network effects that Zomato and Swiggy have. Both platforms offer a robust system for restaurants to manage online orders and also help in advertising and marketing, albeit this comes at a cost. How far can Ola replicate this on its ONDC-linked platform? 

ONDC’S Food Delivery Menu

Ola, Paytm and others on ONDC’s food delivery bandwagon are also banking on the network adding familiar features to ease onboarding of consumers and merchants. 

For instance, popular Bengaluru eateries are in the process of setting up QR codes that will enable consumers to place orders through ONDC-enabled apps on their smartphone. 

In fact, ONDC launched the interoperable QR code system on Tuesday (July 30), which allows sellers to generate a unique QR code that consumers can scan using an ONDC-registered buyer app, starting with magicpin and Paytm. 

This will soon be expanded across the entire network after initial testing. 

Within food delivery, this could help increase visibility of ONDC buyer apps as they look to take on Swiggy and Zomato. 

Neither of these two food delivery giants have such QR codes displayed inside restaurants. It must be understood, however, that the QR codes solve a problem that is unique to ONDC. 

While QR codes will be added soon, ONDC’S food delivery order volume has almost tripled to 14 Lakhs per month in June 2024 from 5 Lakhs per month in March this year. 

Currently, Zomato and Swiggy may together command close to 90% of the market in Delhi and Bengaluru, where ONDC has launched. But is the open network eating into this duopoly?

“Swiggy and Zomato are great companies. But this market is so huge that there is definitely room for other players which offer seamless user experience, cheaper alternatives especially if the hotels, restaurants are themselves willing to discount the end user without the aggregator,” uEngage founder Sharma added .

On the flip side, one does wonder, will ONDC see a decline in food delivery volumes when the discounts are taken off the table, especially if participants actually want to turn profitable. 

Currently, Ola ONDC charges anywhere between 5% to 10% in commission on each order besides nominal delivery charges. But not everyone wants to splurge on discounts to chase the food delivery high. 

PhonePe-backed Pincode and Paytm, which offered as much as INR 100 discount on each food order and free deliveries, are changing their tune.  

Sources claim Pincode has found it hard to navigate through the fragmented ONDC landscape of partners such as third-party logistics players, customer support companies, payments partners and more. 

Paytm took its foot off the discounts accelerator due to headwinds in its core UPI and merchant payments businesses. The fintech giant has turned the focus away from food delivery discounts, prices on Paytm are closer to Swiggy and Zomato prices than Ola. 

Lessons From The Past

Of course, Ola’s potential success in the future will only serve to attract other players to the ONDC space. Amazon has long held ambitions to scale food delivery beyond Bengaluru, while Flipkart is also considering early moves for ONDC-based food delivery. 

Flipkart and Amazon India were well positioned to foray into food delivery and leverage their existing user base, as well as logistics to make a dent. But there is pressure on both these giants to move towards profitability. This curtailed any food delivery ambitions held by Amazon and Flipkart never made a serious move into the space. 

Can Ola’s ONDC success lure these players in?

“Amazon is also in a wait-and-watch mode to see the traction enjoyed by Ola and other such ONDC apps. It may enter the space if Ola can prove that ONDC works for food delivery,” the owner of a popular cloud kitchen brand told us on the condition of anonymity. .

Antler’s Patodia added that one cannot ignore the challenges that being faced by merchants and restaurants in getting on board ONDC buyer apps. He acknowledged that the platform needs to remove the hurdles in the way. 

“Perhaps we will see founders and startups building products that will solve the impending issues associated with seller integrations and make them swifter and simpler. ONDC is too young right now but it is off to a good start. Scaling to 10 Mn transactions a month in two years is no easy feat,” Patodia added.

[Edited By Nikhil Subramaniam]

The post Can Ola’s ONDC Food Delivery Bet Match Swiggy, Zomato? appeared first on Inc42 Media.

EV mobility startup Ola Electric has set a price band in the range of INR 72-76 per equity share for its upcoming initial public offering (IPO), which is opening for bids on Friday (August 2).

The startup is expected to raise over INR 6,145.6 Cr at the upper price band.

Ola Electric’s public offer comprises a fresh issue of shares worth up to INR 5,500 Cr and an offer-for-sale (OFS) component of up to 8.49 Cr shares worth INR 645.6 Cr. The company’s IPO will close on August 6. 

The anchor bidding is starting on August 1. The bid lot of the IPO is 195 shares and in multiples of the same thereafter. 

Its IPO will have 75% allocation towards qualified institutional buyers (QIBs), 10% towards retail, and 15% towards the non-institutional investor (NII) category.

The buzz around Ola Electric’s IPO plans started early last year. In December 2023, the startup filed its IPO draft papers with the SEBI. Initially, the public issue comprised a fresh issue of shares worth INR 5,500 Cr and OFS component of up to 9.51 Cr shares. However, the OFS amount was lowered in its RHP.

Kotak Mahindra, Citigroup, BofA Securities, Goldman Sachs, Axis Capital, and ICICI Securities are some of lead the book runners for its IPO.

Speaking during the IPO launch announcement, Bhavish Aggarwal, founder and CEO of Ola Electric, said, “We don’t focus our energies into ICE or other transitionary technologies like hybrid, etc, but our singular focus is to create the EV future and to create the entire business model, manufacturing ecosystem that goes with it.” 

The EV two-wheeler maker currently leads the market in terms of market share. Aggarwal also highlighted that the startup is aggressively working on its electric motorcycles.

It is pertinent to note that the startup was also planning to launch its electric car. However, reports emerged recently saying that ahead of its public market debut, the startup has kept its e-car plans on hold.

Speaking on this topic on Monday (July 29), Aggarwal said, “We have not made any formal announcement ever, either this way or that way. Our focus is to build the foundations for the EV ecosystem in India. We made a starting point from a product standpoint with the scooter. We are moving to the motorbike. And our immediate focus is on these two-wheeler products and our focus is to build the cell as a foundation layer for any future product, for any company which wants to buy our cells.”

He also reiterated that the company is eyeing exports in the long term. 

While Ola Electric’s IPO is one of the biggest by the Indian startups, the company continues to be a loss-making entity.

Its net loss widened 7.6% to INR 1,584.4 Cr in the financial year 2023-24 (FY24) from INR 1,472.1 Cr in the previous year. Ola Electric’s operating revenue jumped over 90% to INR 5,009.8 Cr during the year under review from INR 2,630.9 Cr in FY23.

Speaking on the profitability aspect, Aggarwal said that the company’s revenue is growing steadily and gross margin also improved in FY24. However, he did not give any timeline for achieving profitability or even EBITDA breakeven.

“If you see manufacturing industries in general, as you grow revenue, you get a lot of operating leverage because your fixed costs don’t scale in line with revenue growth. So, that’s been our story in the last couple of financial years, where as we have grown volumes and we have invested for a higher volume, as we are growing into that capacity, our margins are improving,” said Aggarwal.

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IPO-bound electric mobility startup Ola Electric’s net loss widened 7.6% to INR 1,584.4 Cr in the financial year 2023-24 (FY24) from INR 1,472.1 Cr in the previous year, even as the startup’s top line continued to surge.

On the back of a robust growth in its vehicle sales, Ola Electric’s operating revenue jumped over 90% to INR 5,009.8 Cr during the year under review from INR 2,630.9 Cr in FY23, as per the company’s red herring prospectus (RHP) filed on July 26.

As an electric two-wheeler manufacturer, the Bhavish Aggarwal-led startup currently earns all its revenue from sales of its escooters. Its Ola S1 Pro model is currently bringing in the highest amount of revenue.

Meanwhile, the startup also highlighted in its RHP, “In Fiscal 2024, our revenue from the sale of EV scooters was primarily dependent on the sale of Ola S1 Pro scooter models. We cannot assure you that our future revenue from the sale of EV scooters will be more evenly spread across our other EV scooter models.”

Ola S1 Pro, its premium category scooter, contributed almost 60% to the total revenue. Ola S1 Air generated 18.93% of the income, while sales of Ola S1 generated only 2.68% in revenue in FY24 as against 29.36% in the previous year.

Despite the public market’s inhibition towards loss-making entities, Ola Electric is set to go public with heavy cash burn and no clarity on its path to profitability. In its RHP, the company noted the following points as part of its forward-looking statement: 

• We have a limited operating history and there is no assurance we will be cost effective and profitable.
• We heavily invest in and plan to continue investing in research and development. There is no assurance that we will realise returns on such investments.
• If our vehicles become ineligible for the EMPS (Electric Mobility Promotion Scheme) 2024 subsidy, we may become less competitive due to higher product pricing (without the subsidies), potentially impacting our business and financial performance.
• We intend to utilise INR 1,600 Cr out of the net proceeds for investment into research and development purposes although there is no assurance that such investment will proceed as planned and result in creation of tangible assets.

Ola Electric sold 3.29 Lakh vehicles in FY24 as against 1.56 Lakh units in the previous fiscal year.

It is pertinent to note that Ola Electric filed its draft red herring prospectus (DRHP) with the SEBI in December last year and got approval to launch the IPO from the market regulator in June this year. 

Initially, the public issue comprised a fresh issue of shares worth INR 5,500 Cr and an offer for sale (OFS) component of up to 9.51 Cr shares. As per its RHP, the OFS component is lowered to 8.49 Cr shares, while the size of the fresh issue remains unchanged.

Zooming Into Expenses

In line with its business growth, Ola Electric’s total expenses shot up over 60% to INR 6,277.4 Cr in FY24 from INR 3,883.4 Cr in the previous year, with cost of materials consumed contributing 69.95% to the overall cost.

Cost Of Materials Consumed: Ola Electric’s spending in this bucket jumped over 75% to INR 4,390.9 Cr during the year under review from INR 2,504.8 Cr in FY23.

It is pertinent to note that while the startup manufactures certain EV components, it imports battery cells from two foreign cell manufacturing companies, and plastic parts, electronic child parts and metal parts from other domestic and foreign suppliers. 

As per the RHP, imported supplies comprised 37.03% (a majority of it from China) of the cost of materials consumed in FY24 as against 31.11% in FY23. Meanwhile, domestic supplies comprised 62.97% of the cost of materials consumed in FY24 as compared to 68.89% the previous year.

Employee Cost: Ola Electric spent INR 438.9 Cr towards employee benefits expenses in FY24, registering a mere 2.8% increase year-on-year (YoY).

In that, it spent INR 295.4 Cr on salaries, wages and bonuses, while INR 88.7 Cr was spent as equity settled share-based expenses.

Inventories: The EV makers’s losses in inventories of finished goods, stock-in trade and work-in-progress increased to INR 81.1 Cr in the reported year from INR 73.6 Cr a year ago.

Warranties: The warranty expenses for its electric two-wheelers jumped almost 154% YoY to INR 293.3 Cr in FY24.

Vehicle Repair Services: Interestingly, Ola Electric’s spending towards vehicle repair services fell over 54% YoY to INR 37.6 Cr in the year under review.

Ola Electric’s public issue will open for retail subscription on August 2 and close on August 6.

The post IPO-Bound Ola Electric’s FY24 Net Loss Widens To INR 1,584 Cr, Revenue Jumps 90% appeared first on Inc42 Media.

Electric vehicle maker Ola Electric is set to open its initial public offering (IPO) for retail subscription on August 2, according to its red herring prospectus (RHP). 

The SoftBank-backed company is eyeing a valuation between $4.2 Bn and $4.4 Bn, according to a Reuters report. 

The IPO will close on August 6, while anchor bidding will take place on August 1. 

The public offer comprises a fresh issue of shares worth up to INR 5,500 Cr and an offer for sale component of up to 8.49 Cr shares, as per the RHP. The company has cut the size of the OFS component. As per its DRHP filed in December last year, the company was looking to sell up to 9.51 Cr shares via the OFS.

Founder and CEO Bhavish Aggarwal plans to offload 3.79 Cr shares via the OFS, which is about 20% less than initially estimated in the draft prospectus. 

The company’s expected valuation represents a 18.5% to 22% decrease from its last funding round in September, which valued Ola Electric at $5.4 Bn.

The other shareholders offloading their stake via OFS include Alpha Wave Ventures, Tiger Global, Indus Trust, among others. 

(The story will be updated soon)

The post Ola Electric IPO To Open For Retail Subscription On August 2 appeared first on Inc42 Media.

Ahead of its much-awaited initial public offering (IPO), electric vehicle (EV) major Ola Electric has reportedly shelved its plans to launch electric cars. 

The EV startup has put off its electric car ambitions for “at least two years” to focus more on its two-wheeler business and battery production, Reuters reported citing sources. 

Ola Electric’s “focus is all on the two-wheeler market, including bikes, and mass electrification is still some time away – you need to have (charging) infrastructure,” the report quoted one of the sources as saying. 

As per the report, the company had hired more than 100 employees and engaged external consultants for its electric car project. However, around 30% of this team has quit now and the remaining have been assigned new roles or projects.

The report added that the IPO-bound EV major had also held initial talks with a few auto component suppliers and even built one prototype of the electric car model. The model is said to have been designed at Ola Electric’s studio in the United Kingdom (UK) and built on the lines of a BMW luxury sedan.

The development comes two years after Ola Electric founder and CEO Bhavish Aggarwal, in 2022, announced plans to launch an electric sports car in two years that could reach 100 km per hour speed within 4 seconds.

At the time, he said that the company would build a new plant for car manufacturing at its existing two-wheeler facility in Tamil Nadu. Aggarwal had then said that the unit would have a capacity to make up to 10 Lakh electric cars a year. 

The development comes at a time when Ola Electric is gearing up for its IPO. The company has received the Securities and Exchange Board of India’s (SEBI) approval for a public issue that will comprise a fresh issue of INR 5,500 Cr and an offer for sale (OFS) component of up to 9.51 Cr shares. 

As per reports, the EV manufacturer is planning to launch its IPO as early as in the first fortnight of August and is looking to raise around $740 Mn from the public issue. The company is likely to be valued at around $4.5 Bn for its upcoming IPO, a decline of 16-20% from its last funding round.

In preparation for the public listing, the EV major has undertaken a company-wide restructuring exercise to cut costs and streamline operations including mass layoffs. 

Ola Electric’s net loss widened 88% year-on-year (YoY) to INR 1,471.6 Cr in the financial year 2022-23 (FY23). Operating revenue surged 605% YoY to INR 2,630.9 Cr during the year. 

The post Ahead Of IPO, Ola Electric Shelves Electric Car Project appeared first on Inc42 Media.

Bhavish Aggarwal-led electric vehicle maker Ola Electric is reportedly looking to launch its widely anticipated initial public offering (IPO) as early as in the first fortnight of August.

According to Moneycontrol’s report, citing multiple sources, through the proposed listing, the SoftBank-backed company is looking to raise around $740 Mn via a combination of a fresh issue and an offer for sale.

Just over a week ago, Inc42 reported that the startup is likely to be valued at around $4.5 Bn for its upcoming IPO, a decline of 16-20% from its last funding round.

Inc42 reached out to Ola Electric for comments on the development, the story will be updated based on the responses from the company.

Ola Electric filed its draft red herring prospectus with the Securities and Exchange Board of India (SEBI) for an INR 5,500+ Cr IPO in December last year. Last month, it received the regulator’s nod for the public issue.

Founded by Ola Cabs cofounder Aggarwal, Ola Electric is an EV manufacturer with five scooter models. It is one of the biggest players in the two-wheeler EV space in the country. It operates a comprehensive omnichannel distribution network, which included 935 experience centres and 414 service centres, as of October 2023.

Earlier this year, Ola Electric secured INR 410 Cr (around $50 Mn) in debt funding from EvolutionX Debt Capital via non-convertible debentures (NCDs). The company raised funding by issuing 41,000 NCDs at an issue price of INR 1 Lakh each, as per its filing with the Registrar of Companies (RoC).

As it gears up for its IPO, the company has undertaken a company-wide restructuring exercise to cut costs and streamline operations. The EV player was also said to be planning to sack nearly 400-500 employees.

Ola Electric’s net loss widened 88% to INR 1,471.6 Cr in the financial year 2022-23 (FY23) from INR 783.4 Cr in the previous year. Operating revenue surged 605% year-on-year (YoY) to INR 2,630.9 Cr in FY23. 

(The story will be updated soon)

The post Ola Electric Likely To Launch Its $740 Mn IPO Next Month: Report appeared first on Inc42 Media.

Online travel aggregator MakeMyTrip’s net profit jumped 13.1% year-on-year (YoY) to $21 Mn in the quarter ended June 2024. The company’s net profit stood at $18.59 Mn in the year-ago quarter. 

In a regulatory filing, the Nasdaq-listed startup said that its revenue rose more than 31% to $254 Mn in the first quarter (Q1) of the financial year 2024-25 (FY25) from $196 Mn during the same quarter last fiscal.

The surge largely came on the back of broad-based growth across three verticals – air ticketing, hotel packages, and bus ticketing. 

“We are pleased to see a robust start to this fiscal year. We believe that the long-term growth story of India’s travel and tourism sector is fuelled by multiple macroeconomic drivers like increasing government investments in travel infrastructure, rising disposable incomes of the middle class, and increasing propensity to travel,” said MakeMyTrip cofounder and CEO Rajesh Magow.

He added that the company plans to drive its growth by “capitalising on the shift from offline to online buying and expanding customer base and wallet share”.

During the quarter under review, MakeMyTrip’s gross bookings rose 21.6% YoY to $2.38 Bn. 

Meanwhile, revenue from the air ticketing vertical jumped 25.4% YoY to $57.5 Mn in Q1 FY25. The hotels and packages business contributed $146.8 Mn to the startup’s top line, up 27.5% YoY.

MakeMyTrip’s revenue from bus ticketing business also increased 17.2% to $29.2 Mn in the quarter ended June 2024 from $24.9 Mn in the year-ago quarter. 

On the expenditure front, MakeMyTrip saw its employee benefit costs surge 12.9% to $38.2 Mn in Q1 FY25 from $33.8 Mn in the quarter ended June 2023. It also spent $40.1 Mn towards marketing and promotional activities during the period under review, up 31.0% from $30.6 Mn in Q1 FY24.

The post MakeMyTrip Q1: Profit Jumps 13% To $21 Mn On Robust Travel Demand appeared first on Inc42 Media.

Shares of traveltech majors EaseMyTrip and Yatra soared during intraday session today (July 23) after  finance minister Nirmala Sitharaman announced a slew of initiatives during her Union Budget 2024-25 (FY25) speech to fuel growth of India’s tourism industry.

While EaseMyTrip’s shares touched the intraday high of INR 43.6 each, up 8.86% from the previous close on BSE, Yatra’s shares traded as high as INR 127.35 during the day’s trading session, up 4.9% from the previous close.

Notably, shares of both EaseMyTrip and Yatra closed the trading session at INR 42.25 and INR 125.85, respectively, on Tuesday.

Sitharaman announced that the government has allocated INR 2,479.62 Cr for the tourism sector for FY25, up 46% from the revised allocation of INR 1,692.10 Cr in FY24. 

It is pertinent to mention that the estimate for the tourism industry in the interim budget was pegged at INR 2,449.62 for FY25.

“Tourism has always been part of our civilization. Our efforts in positioning India as a global tourist destination will also create jobs, stimulate investments and unlock economic opportunities for other sectors,” Sitharaman said.

The finance minister also made some key announcements to boost the spiritual tourism sector.

“In FY25, the government announced the development of Vishnupad Temple at Gaya and Mahabodhi Temple at Bodh Gaya in Bihar. “Comprehensive development of Vishnupad Temple Corridor and Mahabodhi Temple Corridor will be supported, modelled on the successful Kashi Vishwanath Temple Corridor, to transform them into world class pilgrim and tourist destinations,” Sitharaman said.

The government has also proposed a comprehensive development initiative for Rajgir. “Rajgir holds immense religious significance for Hindus, Buddhists and Jains. The 20th Tirthankara Munisuvrata temple in the Jain Temple complex is ancient. The Saptharishi or the 7 hotsprings form a warm water Brahmakund that is sacred. A comprehensive development initiative for Rajgir will be undertaken,” she added.

Besides this, the FM also announced a simpler tax regime for foreign shipping companies operating domestic cruises in India to boost cruise tourism in the country.

Meanwhile, EaseMyTrip’s cofounder Rikant Pittie, said, “The government’s attempt to position India as the global tourist destination is evident in the Union Budget 2024-25. We are optimistic that this will enhance the overall experience of the tourists visiting these religious sites and will uplift state tourism.”

At the heart of this announcement lies the growing emphasis of the government on spiritual tourism with the inauguration of Ram Temple in Ayodhya in January earlier this year. Even the hospitality and tourism sector welcomed this move by the government. 

According to a report by IBEF, India’s travel market is expected to reach $125 Bn by FY27 against $75 Bn in FY20. Additionally, projections indicate that international tourist arrivals are poised to reach 30.5 Bn by 2028.

The post EaseMyTrip, Yatra’s Shares Jump After FM Unveils Initiatives To Boost Tourism appeared first on Inc42 Media.

A day after Google reduced the subscription prices for its maps platform, Ola founder and CEO Bhavish Aggarwal announced a new pricing structure to woo developers to Ola Maps. 

In a blog post, Aggarwal announced the updated pricing for Ola Maps subscription, which will be free for all developers for the first year. The company said that the new pricing slab will come into effect from Thursday (July 18) itself. 

“In response to overwhelming demand for extended commitments and higher-tier services, Ola Maps is excited to announce a comprehensive update of our pricing structure today. For each API, we are adding a completely FREE tier for 5 Mn calls every month! This would cover more than 90% of the Indian developers and startups,” said Aggarwal. 

He claimed that Ola Maps’ new pricing slab for “larger volumes” is 50% cheaper compared to Google Maps’ reduced prices.

In addition, Ola Maps will also offer two years of free usage for developers signing up for more than three years of commitment. Startups as well as small and medium businesses (SMBs), building apps on ONDC will be able to avail three years of free subscription on the maps platform. 

Speaking about the traction gained by Ola Maps, Aggarwal said that it has so far seen more than 10,000 developers sign up for the platform. 

Training guns at Google, he said that big tech giants, for years, viewed “India primarily as a market to tap”. He added that tech majors were imposing high costs on developers, collecting data, and “often” overlooked India’s digital sovereignty. 

“It’s surprising that even now, some tech giants hesitate to fully localize their pricing in India. Offering payment in INR should be standard, not exceptional. This disconnect from local realities underscores why India needs homegrown tech leaders. India’s tech talent, our innovative spirit, and our deep understanding of emerging markets give us an edge that no Silicon Valley import can match…,” the post added.

The company also announced that it soon plans to launch a host of new APIs, SDKs and features on the Ola developer platform.

This comes a day after Google slashed the prices for its Google Maps platform for Indian developers and announced that it will start accepting payments for Google Maps subscription in Indian rupees. 

Right after the announcement, the Ola CEO termed Google’s move to slash prices “too little too late”. Last week, he had urged Indian developers to stop using Google Maps and announced one-year free access to all developers to Ola Maps on AI-driven Krutrim platform.

The post After Google Maps Cuts Prices, Ola Maps Announces New Pricing Structure To Woo Developers appeared first on Inc42 Media.

Electric vehicle (EV) maker Ola Electric is reportedly likely to be valued at around $4.5 Bn for its upcoming IPO, a decline of 16-20% from its last funding round. 

In its last funding round of $384 Mn in October last year, led by Singapore’s investment firm Temasek, Ola Electric was valued at around $5.4 Bn. However, Reuters cited a source as saying that this valuation is expected to drop due to a “recalibration” of tech stock valuations globally. 

While the final valuation is still subject to change, it is unlikely to reach the $6 Bn target that Ola Electric’s founder, Bhavish Aggarwal, had hoped for the IPO, the report added citing sources.

Meanwhile, a source told Inc42 that the book building process is ongoing and the final valuation is yet to be determined. The company aims to price the IPO attractively, ensuring it offers value to investors. The reported figure is a close estimate, the source added.

Ola Electric filed its draft red herring prospectus with the Securities and Exchange Board of India (SEBI) for an INR 5,500+ Cr IPO in December last year. Last month, it received the regulator’s nod for the public issue.

Founded by Ola Cabs cofounder Aggarwal, Ola Electric is an EV manufacturer with five scooter models. It is one of the biggest players in the two-wheeler EV space in the country. It operates a comprehensive omnichannel distribution network, which included 935 experience centres and 414 service centres, as of October 2023.

Earlier this year, Ola Electric secured INR 410 Cr (around $50 Mn) in debt funding from EvolutionX Debt Capital via non-convertible debentures (NCDs). The company raised funding by issuing 41,000 NCDs at an issue price of INR 1 Lakh each, as per its filing with the Registrar of Companies (RoC).

As it gears up for its IPO, the company has undertaken a company-wide restructuring exercise to cut costs and streamline operations. The EV player was also said to be planning to sack nearly 400-500 employees.

Ola Electric’s net loss widened 88% to INR 1,471.6 Cr in the financial year 2022-23 (FY23) from INR 783.4 Cr in the previous year. Operating revenue surged 605% year-on-year (YoY) to INR 2,630.9 Cr in FY23. 

The post Ola Electric IPO: Valuation Likely To Be Set At $4.5 Bn appeared first on Inc42 Media.

Ola founder and chief executive officer (CEO) Bhavish Aggarwal said that Krutrim will soon launch high-quality translation APIs for English to/from Indian languages across text, speech, and video modalities on Krutrim cloud.

Taking to X, Aggarwal asked his followers, “What kind of apps and use cases would you use it for? Any feature requests?”

Krutrim AI, founded by Aggarwal, is an artificial intelligence company focusing on Indian language capabilities. The AI can understand 22 Indian languages and generate content in 10 languages.

Krutrim released its Android app on May 2, now available on the Google Play Store. The app offers writing assistance and information gathering. At a recent event, Aggarwal stated that the startup aims to build a platform for Indian developers to create global apps with Krutrim.

The company launched Krutrim AI Cloud, its cloud platform for enterprises, researchers, and developers. This platform provides access to AI computing infrastructure, Krutrim’s foundational models, and other open-source models like Meta’s Llama 3 and Mistral.

Krutrim also announced a partnership with Databricks to pre-train and fine-tune its foundational LLM for Indian languages. The collaboration aims to accelerate the development of generative AI solutions in India.

The startup competes with domestic players such as Bharat GPT by CoRover.ai, Pragna by Soket Labs, Tech Mahindra-backed Project Indus, and Lightspeed-backed Sarvam AI. Globally, Krutrim ranks 19th among 79 competitors, including OpenAI, DeepMind, and xAI.

In January 2024, Krutrim AI became India’s first AI unicorn after raising a $50 million funding round led by Matrix Partners India. This valuation of $1 billion marked Krutrim as India’s first unicorn of 2024 and the first homegrown AI firm to reach this milestone.

Krutrim is developing indigenous data centres and plans to enter server-computing, edge-computing, and super-computers. The startup is also working on manufacturing AI-optimised silicon chips.

According to ‘India’s Generative AI Startup Landscape 2023’ report, the country’s GenAI market is projected to grow from $1.1 billion in 2023 to $17 billion by 2030, with a CAGR of 48%.

The post Bhavish Aggarwal’s Krutrim To Launch High-Quality Translation APIs For Indian Languages Soon appeared first on Inc42 Media.

IPO-bound foodtech major Swiggy has initiated its fifth employee stock option plan (ESOP) liquidity programme worth $65 Mn (about INR 543.5 Cr). 

In a statement, the startup said that the programme will allow employees at all levels and functions to get liquidity on their ESOPs.

This is among the biggest ESOP liquidity programmes announced by the startup. To date, the company has facilitated over INR 1,000 Cr in ESOP liquidity via five such programmes, benefiting more than 3,200 employees.

Commenting on the development, Girish Menon, head of HR at Swiggy, said, “Employees owning shares  of their company creates alignment of incentives and a sharp focus on collaborative excellence, which is a virtuous cycle that we believe in and espouse.”

Swiggy launched the first ESOP programme in June 2018. Following this, it announced two ESOP liquidity programmes worth $35-$40 Mn in 2021. The two tranches under this were completed in 2022 and 2023.

According to a Moneycontrol report, Swiggy cofounders Sriharsha Majety and Nandan Reddy will also sell some shares in the ESOP liquidity programme. Swiggy declined to comment on Inc42’s queries on the issue.

Earlier today, Inc42 reported that Swiggy and its rival Zomato have increased their platform fee to INR 6 per order in key markets like Delhi and Bengaluru.

The latest development comes at a time when Swiggy is gearing up for its public listing. The foodtech major filed its draft red herring prospectus (DRHP) with market regulator Securities and Exchange Board of India (SEBI) via confidential route in April. The startup is looking to raise over INR 10K Cr via the IPO, which will likely include a fresh issue of shares worth INR 3,750.1 Cr and an OFS component of up to INR 6,664 Cr.

Unlike listed peer Zomato, Swiggy continues to be a loss-making entity and is aggressively chasing profitability. Earlier, Inc42 reported that it was poised to achieve nearly INR 10K Cr in revenue in FY24 on the back of the rising number of Instamart orders, increased platform fees in food delivery, and a growing momentum in its dining out business.

Swiggy’s net loss crossed the INR 4,000 Cr mark in FY23, rising 15% to INR 4,179.3 Cr from INR 3,628.9 Cr in FY22. Operating revenue surged over 40% to INR 8,264.4 Cr in the fiscal year from INR 5,704.9 Cr in FY22, driven by significant expansion in the quick commerce vertical.

The post IPO-Bound Swiggy Initiates Fifth ESOP Liquidity Programme Worth $65 Mn appeared first on Inc42 Media.

Update | July 15, 12:35 PM

Almost over a month after Inc42 had exclusively reported on BluSmart eyeing to raise INR 200 Cr ($24 Mn), the startup today officially announced raising the same amount from responsAbility Investments AG, Sumant Sinha, MS Dhoni Family Office, and BluSmart founders.⁠ The company aims to use the fresh capital to expand its operations and build EV charging infrastructure and assets in the mega cities of India.

Original Story | May 22, 9:16 PM

Delhi-NCR based EV cab hailing startup BluSmart is looking to raise around INR 200 Cr in a pre-Series B funding round, as per the startup’s regulatory filing. 

People aware of the development said the funding round will close in June and will see participation from major new and existing investors. The regulatory filing stated that the capital raised will be utilised for the growth of the business as it is “capital-intensive” in nature. 

Confirming the development, BluSmart cofounder Punit K Goyal told Inc42, “BluSmart is raising $25 Mn or INR 200 Cr in an equity preference round. This is a Pre-Series B round.” 

The new round comes almost four months after BluSmart raised $25 Mn from Switzerland-based impact investor responsAbility in a mezzanine structure, including partial equity dilution and debt. That round came right after BluSmart rolled out a new fare structure for different times of the day, which includes surge pricing like app cab aggregators – Ola and Uber.

Prior to this in December last year, the startup had announced raising of $24 Mn on a rights issue basis. This round saw participation and over-subscription from its existing investors, founders and leadership team.

In May 2023, the startup had raised $42 Mn in a bridge round led by existing investors BP Ventures, and Survam Ventures. This funding round also saw participation from the startup’s leadership team. 

Over the years, the company has raised funds from BP Ventures, Survam Partners, Mayfield India Fund, 9 Unicorns, JITO Angel Network, Green Frontier Capital, Stride Ventures, Alteria Capital, and BlackSoil, among others. To date, the startup has raised around $200 Mn in growth capital which comprises $122 Mn in equity and $78 Mn in debt.

Founded in 2019 by Anmol Jaggi and Punit K Goyal, BluSmart offers EV ride-hailing services and charging infrastructure across Delhi NCR, and Bengaluru. The startup currently operates over 7,300 EVs and aims to increase the fleet size to 10,000 across Delhi NCR and Bengaluru by end of this year.

The company claims to have completed more than 10 Mn rides so far, travelling more than 330 Mn zero-carbon Km in the process. At present, BluSmart competes against the likes of Uber, Ola, Rapido, InDrive, Shoffr, among others.

BluSmart claims to have touched revenue of more than INR 390 Cr in the financial year ending on March 31, 2024, a significant increase from INR 160 Cr in FY23. The startup claims to have achieved $60 Mn (INR 500 Cr) in annualised revenue run rate (ARR) in April 2024, from $29 Mn in April 2024.

However, the FY24 figures could not be verified since the startup has not yet filed its audited financial statements. 

The post [Update] Exclusive: BluSmart To Raise INR 200 Cr In Fresh Funding From New, Existing Investors appeared first on Inc42 Media.

Hospitality major OYO’s parent Oravel Stays Ltd is reportedly planning to rope in Sumer Juneja, managing partner and head of EMEA & India Investing at SoftBank Vision Fund, as a non-executive director on its board.

According to his LinkedIn profile, Juneja has been with SoftBank for nearly six years. Prior to that, he served as a board member of the foodtech company Swiggy for about four years. Juneja has also worked with Norwest Venture Partners and Goldman Sachs.

As per PTI’s report, the appointment is subject to shareholders’ approval to be sought at an extraordinary general meeting (EGM).

Inc42 has reached out to OYO on the development. The story will be updated based on the response.

Sumer will join Oravel Stays’ Board as a nominee director of Softbank, the report said. Also, the move signals SoftBank’s bullish stance on OYO, in light of the company turning profitable, sources were quoted as saying in the report.

OYO reported its first full year of profitability with a net profit of about INR 100 Cr in FY24, founder and CEO Ritesh Agarwal claimed. Taking to social media platform X, he said OYO logged its eighth straight quarter of positive EBITDA in Q4 FY24.

Agarwal added that the SoftBank-backed startup’s cash reserves stood at around INR 1,000 Cr at the end of the year.

Earlier this year, OYO launched a joint venture with lead investor SoftBank under the luxury hotel chain brand ‘Sunday’. These properties have been launched in Jaipur, Vadodara and Chandigarh, with more cities lined up.

“SoftBank is actively supporting OYO and showing renewed interest in its prospects. They want to provide impetus to the company’s growth in international markets,” the report quoted a person familiar with the development.

Meanwhile, the hospitality unicorn is raising $50 Mn (about INR 415 Cr) from financial services provider InCred, to utilise the capital for global expansion, which could also include the acquisition of smaller business in the same sector.

Post the allotment, InCred would own around 2.11% stake in the Ritesh Agarwal-led startup.

The post OYO Likely To Rope In SoftBank’s Sumer Juneja To Its Board appeared first on Inc42 Media.

Hospitality giant OYO has come to the IPO table twice and left without a bite. While the company will refile the draft prospectus for its much-anticipated initial public offering soon, the focus has turned to OYO’s efforts to refinance debt ahead of the public listing. 

According to sources, the OYO IPO is likely to be pushed back by six months to a year, especially as the company awaits the terms of the refinancing deal for the $660 Mn Term Loan B availed by founder and CEO Ritesh Agarwal to buy back shares from investors in 2019. 

The IPO postponement is largely because of the material implications on OYO’s financials from this refinancing of this loan, which was already restructured in 2022. 

OYO is said to be actively looking for a pre-IPO placement round cumulatively raising $100 Mn – $150 Mn from various fund offices, HNIs  albeit at a much lower valuation than its last fundraise, when it commanded a valuation of close to $10 Bn. Top sources privy to the ongoing funding developments within the company said that the company has raked in $100 Mn from a clutch of investors and the announcement is likely to happen next week.

While Inc42 could not verify the deal structure, it is said to involve a secondary share sale even as the company’s largest investor SoftBank planning to hold on to its 46% stake in the hospitality startup.

OYO’s Turnaround Towards Profits

The refinancing of around $660 Mn (approx INR 5,300 Cr) of the pending Term Loan B amount  which is $450 Mn will help the company save INR 124 Cr – INR 141 Cr  per annum and will have material implications on the FY25 financial performance. 

“The refinancing will reduce interest rate from 14% to 10%, lead to considerable annual savings and extend the repayment date to 2029. OYO’s operating costs improved to 14% of top line revenue in FY24, from 19% in FY23. Costs were cut across the board, which also led to layoffs,” as per our sources close to the company management.

This is in line with company’s claims of turning around the INR 1,000 Cr net loss in FY23 to INR 100 Cr net profit in FY24. OYO is said to have significantly cut down its employee costs by laying off nearly 600 employees even as lease related costs shot up. 

CEO Agarwal further said that the company had logged eight consecutive quarters of profitability in FY23 and FY24, and had cash reserves of INR 1,000 Cr. While OYO is yet to file its audited financial statements for FY24, the company seems to have turned things around in a major way. 

Yes, the debt restructuring is a challenge that is yet to be overcome, but from a business model and revenue perspective, the turnaround is evident and nothing short of a remarkable feat for OYO, where there have been questions for years about profitability. 

So what really worked out for OYO in FY24?

Sharp Focus On Spiritual Tourism

In January 2024, Ritesh Agarwal was one of the few startup founders, officially invited for the Ram Mandir consecration ceremony in Ayodhya. The invitation came after OYO signed up more than 60 new properties and homestays in the temple town to cater to the influx of tourists. 

This is not an isolated incident but a concerted push by OYO to cater to the millions of travellers who visit places of spiritual or religious importance. 

Besides Ayodhya, OYO has targetted Katra (in Jammu & Kashmir) as well as holy sites in Uttarakhand and other spiritual hotspots in the past year. In January this year, OYO announced that it will add 400 properties in popular destinations for spiritual travel including locations such as Puri, Shirdi, Varanasi, Amritsar, Tirupati, Haridwar, and the Char Dham route by the end of this year.

The sharp focus on spiritual travel has shown big returns. “The pilgrim stays don’t need much of a facelift since pilgrims require basic facilities to stay for 3-5 days when they are on the move. Religious tourism has been a key driver of growth for OYO especially this year,” a hospitality sector analyst told us.

As further proof, the company claimed a staggering 350% increase in searches for Ayodhya on OYO over the past year. 

Sports Tourism & Corporate Bookings Grow

Cricket is often called a religion in India and OYO seems to have cashed in on the holy sites for cricket fans around the country. 

India hosted the ICC World Cup in 2023 and OYO increased its presence in the host cities with the addition of 400 hotels across the country strategically situated near the host stadia. 

“In 2022, OYO did delist many hotels from the platform due to tiffs with hotel partners and since there was revision of contracts. However more hotels were onboarded in 2023 and 2024,” a source, who is privy to the company’s strategy, told Inc42.

Besides sports travel, corporate travel bookings have also shot up last year and this year leading to expansion in medium budget hotels. The company said earlier that it saw a 20% growth in the revenues in H1 2023 on the back of adding nearly 2,800 corporate clients in the same period. 

Sources within the company stated that OYO has onboarded 15,000 corporate accounts and more than 10,000 travel agents, which has significantly improved the revenue mix for OYO, and allowed the company to rely on two separate growth engines. 

Tapping First-Generation Hoteliers 

In 2023, OYO launched the inaugural cohort of its accelerator programme under which the company partnered with the first-generation hoteliers. The company is today running 1,000 hotels under the project. In March, 2024 OYO tied up with JP Morgan to offer a credit facility for these entrepreneurs.

Besides helping these hotels scale up and grow, OYO earns extra commissions from these hotel partners and it also helps them avail credit facilities which also comes with a revenue component. 

“One of the reasons why OYO has been successful in tying up with first generation hotel owners is that the operations are running far more smoothly than the legacy hotels. There are less conflicts of interests and better revenue sharing percentages in this tie-up and each entrepreneur is running 2-3 hotels under the programme,” a source added. 

Restructured Inventory, Focus On Branded Hotels

OYO’s brand is built around its proposition for the budget traveller. But in FY23, the company shed a lot of its inventory of rooms to focus on profitability. As per our sources who are privy to the internal business and revenue strategy of OYO, the company delisted thousands of hotels in FY23 following conflicts of interest and tussles with hotel partners. 

“The first shift was to restructure its hotel inventory in India. It stopped chasing growth in terms of the number of hotels. The culled its low-performing and low-customer experience hotels. A large part of this clean-up played out in FY23 where its hotel count decreased from 12,000 to 8,000,” the source mentioned above added.

Despite a massive drop in the number of hotels, OYO’s gross booking value or top line revenue increased substantially to INR 3.9 Lakh per hotel in FY23 from INR 2.19 Lakh per hotel in FY22.

“There was increased focus on customer reviews and hotels were accorded Super OYO tag based on customer ratings. This also led to an increase in the footfalls for Super OYO hotels. This is akin to the Superhost tag on Airbnb,” the source added. 

Following this, the company increased the number of hotel partners in FY24, but the updated GBV numbers for FY24 are not available yet. Those in the know told us that the premium category drives revenue growth, but this space was largely captured by legacy hotels. OYO zeroed in on some properties to onboard them and improve visibility and also launched new brands. 

According to a Hotelivate report, the branded and organised hotel sector in India closed 2023 with decade-high numbers for occupancy of 66.1%, average daily rate of INR 6,869 and revenue per available room (or RevPAR) of INR 4,537, which is nearly double of FY23. 

For instance, in April 2024, OYO launched a joint venture with lead investor SoftBank under the luxury hotel chain brand ‘Sunday’. These properties have been launched in Jaipur, Vadodara and Chandigarh, with more cities lined up. 

Improving Take Rates With Revenue Sharing Strategy

Several years ago, OYO onboarded thousands of hotels with a minimum guarantee for revenue, but at the time its focus was on expansion. 

Now, the focus is on revenue, which means the company has turned to a revenue-sharing strategy with the onus now on hotels to improve the infrastructure, even as OYO will give them a broader access to the consumer base, marketing tools and technology. 

It charges partner hotels 30% on average in commission these days, with the revenue sharing varying according to hotel’s frequency of bookings and how much value it is offering the platform. 

While the earlier minimum guarantees posed challenges such as cash burn and reckless spending on low quality hotels, the new revenue sharing model allows the company to target more premium hotel chains for partnerships. 

Sharpening Focus On Overseas Markets

The final piece of the puzzle seems to be OYO’s focus outside India. 

Sources close to OYO claim the company has scaled down overseas from 80 geographies to 35 today. This also means a bigger focus on the markets that are bringing in revenue and where the company does not have to go up against big competition. “OYO set up nearly 400 rooms in major Chinese cities. However it has driven its focus away from China to the UK and few cities in the US now,” sources further added. 

OYO faces stiff competition in Europe and many large cities in the US in the vacation homes segment , but this is less of a problem in Nordic countries, Southeast Asia as well as parts of the UK and US which regulate platforms like Airbnb. These markets have come to the fore for OYO in the past two years.

Further, there has been a 21% increase in the overseas travel from India compared to 2019 with a greater uptick in the first quarter of 2024, according to the MasterCard Economics Institute’s latest report on the back of larger demand from middle class families. 

“Surprisingly, markets such as the US and UK also grew, perhaps due to the strong South Asian and Indian diaspora in the hotelier business in these countries and the value hunting by customers due to the tepid economy,” sources privy to OYO’s business growth told us. 

Can OYO Refinance In Time?

While the sharper focus on the unit economics, business model and strategy have seemingly delivered the results from a financials perspective, the next big challenge for OYO will be to show that its past indebtedness will not be a major long-term problem. 

Profitability is the biggest demand by public markets investors, and many new-age tech companies such as OYO which wanted to list in 2021 spent the last two years figuring out the answer. It seems OYO is ready now, but the final hurdle will be the terms of the refinancing. 

The timing cannot be better for OYO with the IPOs of TBO Tek and ixigo this year showing that investors have a lot of appetite for new-age stocks, but almost all of these companies came to the IPO table with a consistent record of profitability. 

Now, OYO has to prove that its turnaround in the past year was not a flash in the pan and that profitability can be sustained for the foreseeable future.  

[Edited By Nikhil Subramaniam]

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The Central Consumer Protection Authority (CCPA) has directed listed travel tech startup Yatra to refund INR 2.52 Cr to customers for 4,387 flight bookings cancelled due to the Covid-19 lockdowns.

In a statement, the CCPA said it has directed Yatra to set up dedicated arrangements at the National Consumer Helpline (NCH) to expedite the processing of the refunds. 

Under this, Yatra will be required to deploy five personnel to the NCH to field calls for 4,837 passengers to inform them that their pending refunds due to Covid-19 lockdown-related flight cancellations will be processed. The costs incurred for engaging these five dedicated personnel will be fully covered by Yatra.

Explaining the matter, the CCPA said it initiated suo-moto action against Yatra after it came to its notice that many grievances were lodged relating to non-refund of cancelled air tickets on account of Covid-19 lockdown, with consumers alleging that the travel agencies informed them that refunds were not received from the airlines.

Following this, the CCPA issued a show cause notice to Yatra in March 2021. The Authority said that a number of hearings were held between July 2021 and June 2024, which has resulted in Yatra making “significant progress” in reducing the total number of pending refund bookings.

“In 2021, there were 36,276 pending bookings amounting to INR 26.25 Cr. As of June 21, 2024, this number has been significantly reduced to 4,837 bookings, amounting to INR 2.52 Cr,” the statement added.  

Besides, the CCPA also said that there were a total of 5,771 bookings pertaining to airlines for pending refunds amounting to INR 9.6 Cr in 2021. By 2024, Yatra has reduced this pendency to 98 bookings with an outstanding amount of INR 31.79 Lakh.

“CCPA vide order dated 27.06.2024 directed 22 remaining airlines of Yatra to expeditiously refund INR 31,79,069 to consumers,” it added.

The statement also said that during the proceedings held before the CCPA, other travel tech platforms like MakeMyTrip, EaseMyTrip, ClearTrip, and ixigo refunded the entire amount to consumers whose tickets got affected due to Covid-19 lockdowns.

It is pertinent to note that Yatra slipped into loss in the financial year 2023-24 (FY24). The travel tech platform posted a net loss of INR 4.5 Cr during the year as against a net profit of INR 7.6 Cr in FY23.

Shares of Yatra ended today’s trading session 0.4% higher at INR 127.15 on the BSE.

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Zoomcar’s global president Adarsh Menon has quit the company, days after the Nasdaq-listed company terminated its cofounder Greg Moran from the position of its CEO.

As per the company’s recent filing with the Securities and Exchange Commission (SEC), Menon resigned from the company, effective June 30, 2024.

“On June 26, 2024, Mr. Adarsh Menon, the President of Zoomcar Holdings, Inc. (the “Company”), resigned from his employment effective June 30, 2024. Mr. Menon’s departure was not in connection with any disagreements with the Company,” the company said in the filing.

Menon’s departure from the self-driving car marketplace startup comes months after his appointment in January this year to lead the business and operations of Zoomcar.

Menon brought with him over two decades of experience of working in top positions in companies like Flipkart and Hindustan Unilever.

While Zoomcar named Hiroshi Nishijima as its interim CEO after Moran’s termination, it is not yet clear who would head the business and operations of the company as its global president after Menon’s exit.

Zoomcar declined to comment on Inc42’s queries on the development. 

Founded by Moran and David Back in 2013, Zoomcar is a marketplace for renting self-driving cars. The startup connects hosts with guests, who choose from a selection of cars for use at affordable prices. 

The Bengaluru-based startup started trading on the Nasdaq on December 29 last year, following a SPAC merger with Cayman Islands-registered Innovative International Acquisition Corp. 

The startup’s net revenue declined 19% to $2.4 Mn in the three months ended December 31, 2023 from $3 Mn in the year-ago quarter, hurt by a decline in gross bookings due to lower number of days booked. 

Zoomcar is yet to post its FY24 earnings results.

However, the company, in a recent filing with the SEC, said it anticipates “significant changes” in its results of operations for the year ended March 31, 2024 (FY24) compared to the previous year. 

Zoomcar expects its total revenue to rise to about $9.8 Mn in FY24 from $8.6 Mn in the previous fiscal year. It also expects to report a significant decline in net loss to $34 Mn in FY24 from $62 Mn in the previous fiscal.

“The reason for the increase in revenue is that the company prioritised higher duration per trip bookings to seek to maximise revenue, combined with a reduction in incentive payments due to company hosts by converting to a direct settlement process. The primary reason for the decrease in net loss is that the company reduced operating costs over the 2024 fiscal year. This reduction in operating costs was driven by overall company-wide efforts to achieve enhanced operational and service delivery efficiency beginning in January 2023,” said Zoomcar in the SEC filing last week.

It said that the key drivers of the cost savings during the fiscal included reduction in personnel costs, closure of certain subsidiaries, workforce optimisation, and cost rationalisation for its India-based call centres.

Shares of Zoomcar have tumbled almost 100% since listing on Nasdaq and ended the last trading session at $0.19.

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Two days after Ola’s founder and CEO Bhavish Aggarwal announced that the ride-hailing startup has fully exited Google Maps and moved to its in-house navigation platform Ola Maps, he has now urged Indian developers to stop using Google Maps and also announced one-year free access to all developers to Ola Maps on AI-driven Krutrim platform.

Besides, Aggarwal also claimed to offer over INR 100 Cr in free credits to developers.

In an X post, Aggarwal said, “After #ExitAzure, it’s time for developers to #ExitGoogleMaps! 1 YEAR FREE access to all developers to Ola Maps on @Krutrim, more than ₹100 Cr in free credits!”

“ We’ve been using Western apps to map India for too long and they don’t get our unique challenges: street names, urban changes, complex traffic, non-standard roads etc. Ola Maps tackles these with AI-powered India-specific algorithms, real-time data from millions of vehicles, leveraging and contributing massively to open source (5 Mn+ edits just last year!),” he added.

Aggarwal further claimed its map is outperforming competitors in terms of accuracy in location, search and ETA (estimated time of arrival), among others. 

It is pertinent to note that this move is a part of Aggarwal’s broader strategy to bolster its Krutrium platform. 

For instance, in May, the founder notified about bringing over 2,500 developers on board who will be working to get companies onto its cloud platform over the coming weeks.

Besides, he asserted that Ola would stop using Microsoft’s cloud computing platform Azure and migrate to Krutrim’s cloud.

Earlier, Aggarwal also claimed to offer developers free cloud usage for a year if they switch to Krutrium Cloud from Microsoft’s Azure. 

Notably, Krutrim AI released its Android app in the Play Store on May 2. Previously, the founder has outlined his intentions to build a platform for Indian developers to build global apps with Krutrim.

Krutrim became India’s first AI unicorn earlier this year after raising a $50 Mn funding round led by a clutch of investors, including Matrix Partners India.

Aggarwal’s third startup Krutrim launched its AI model in December with functionality similar to other open-source large language models (LLM) such as ChatGPT and Meta’s Llama 2.

Krutrium competes against domestic players such as Bharat GPT by CoRover.ai, Pragna by Soket Labs, Tech Mahindra-backed Project Indus, and Lightspeed-backed Sarvam AI in India.

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Mobility startup Ola Cabs’ founder and CEO Bhavish Aggarwal on Friday (July 5) said that the ride-hailing startup has fully exited Google Maps and moved to its in-house navigation platform, Ola Maps. 

In a post on X, Aggarwal claimed that the move will enable Ola Cabs to save INR 100 Cr annually in charges payable to Google. 

“After Azure exit last month, we’ve now fully exited google maps. We used to spend INR 100 Cr a year but we’ve made that 0 this month by moving completely to our in-house Ola maps!” said Aggarwal in a post. 

Teasing additional functionalities, he also said that Ola Maps will also “soon” add more features such as street view, NeRFs (neural radiance fields), indoor images, 3D maps, drone maps, among others.

In the same post, Aggarwal also announced that application programming interface (APIs) for Ola Maps will be available on its sister AI cloud platform Krutrim. 

The move to shift to the in-house navigation platform comes six months after Ola Electric commercially launched Ola Maps in January this year, with the roll out of the Move OS 4 software platform for its electric two-wheelers.

The company’s in-house navigation platform has been in the making for more than a year now. Last year, the mobility startup had said that it was developing a dedicated maps system for its vehicles and apps. It now looks like Ola Cabs too has found synergies with Ola Maps and deployed it for use on its ride-hailing app. 

Curiously, the shift to Ola Maps also comes two months after Aggarwal publicly said that the mobility platform would move its IT workload from Microsoft’s Azure to Krutrim’s cloud. At the time in May, the Ola Cabs boss had said that the shift was in response to Microsoft-owned LinkedIn pulling down his post that termed the usage of the pronoun ‘they’ as an “illness”.

The shift to an in-house platform will help Ola trim losses and help its further scale up Ola Maps. Ola parent ANI Technologies reported a consolidated net loss of INR 772.2 Cr in the financial year 2022-23 (FY23) down nearly half from INR 1,522.3 Cr in the previous fiscal year. Meanwhile, operating revenue rose 42% year-on-year (YoY) to INR 2,799.3 Cr .

The development also comes close on the heels of the mobility platform shoring up its ecommerce play on the back of its partnership with Open Network for Digital Commerce (ONDC). Last month, the startup was said to be planning to roll out its grocery delivery through the network.

Meanwhile, its sister firm and EV juggernaut Ola Electric has been gearing for an initial public offering (IPO). In June, it received Securities and Exchange Board of India’s (SEBI) approval for a public listing that will comprise a fresh issuance of shares worth INR 5,500 Cr and an offer for sale (OFS) component of up to 9.51 Cr shares. 

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A day after scores of autorickshaw and cab drivers staged a protest in Bengaluru, seeking action against unauthorised bike taxis, the Karnataka transport department on Friday (July 5) issued an order to conduct a special enforcement drive against on these services.

The autorickshaw and cab drivers laid siege to the transport department’s head office in Shanti Nagar area, protesting against bike taxis and implementing a ‘one city, one cab fare’, Moneycontrol reported.

Following Thursday’s protest, additional commissioner for transport (Enforcement-South), C Mallikarjuna, issued an order, directing all regional transport offices (RTOs) in Bengaluru to form special investigation teams to crack down on unauthorised bike taxis, including electric bike taxis.

“Our major demands include action against illegal bike taxis, implementation of ‘one city, one cab fare,’ and action against Porter company which is forcing goods vehicle owners to display advertisements on vehicles. We also demanded that the transport department issue school bus permits and online special permits. The department has assured us of action against bike taxis from July 5,” said S Nataraj Sharma, president of Federation of Karnataka State Private Transport Associations.

Sharma claimed that over 1,000 members from 32 unions participated in the protest. 

Not to mention, cab drivers have been demanding a uniform fare structure for all cabs, including Ola and Uber-operated ones, by categorising vehicles into three classes based on the cost of the vehicle. 

Earlier in February, the Karnataka government introduced uniform fares for cabs operating under aggregator rules by firms like Ola and Uber, as well as for city taxis (non-app-based city taxis).

This comes against the Karnataka HC’s directive in April asking the Karnataka government to protect bike taxi operators against individuals or entities attempting to unlawfully obstruct bike taxi riders from carrying out their services.

It is pertinent to note that after massive protests from auto-rickshaw unions against Rapido bike taxis and other unauthorised illegal e-bike taxi services in March, the Karnataka government withdrew the Electric Bike Taxi Scheme of 2021, citing its blatant misuse.

Under the policy, organisations or individuals can register their two-wheelers as taxis. Besides, companies operating such bike taxis will have to provide insurance coverage for the riders and the owner.

While Rapido and Uber operate petrol-run bike taxis, Ola operates electric bike taxis in Bengaluru. 

Notably, Ola cofounder, Bhavish Aggarwal relaunched Ola Bike, its motorcycle taxi service, in Bengaluru last year saying that the service would exclusively use electric scooters made by Ola Electric this time. However, the company has yet to apply for a license.

The development comes at the heart of challenges being faced by bike taxis in Bengaluru for a very long time now. Moreover, there have been frequent clashes between auto drivers and bike taxi operators. Last year, auto drivers protested blocking some bike taxis and even assaulting the riders. 

In the past, the state police had imposed penalties on drivers and confiscated bikes in the absence of a clear-cut policy for bike taxis. 

States in the likes of Andhra Pradesh, Bihar, and Goa, have already permitted bike taxis. Goa, in particular, has had bike taxis, locally known as pilots, for many years.

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Shares of online travel aggregator (OTA) ixigo jumped 7.7% to INR 176.55 during the intraday trading on the BSE on Friday (July 5) following its stellar FY24 performance.

ixigo on Thursday (July 4) posted a 212% jump in its net profit to INR 73.1 Cr in FY24 from INR 23.4 Cr in the previous fiscal. Its operating revenue during the year also rose almost 31% year-on-year (YoY) to INR 655.9 Cr.

The train ticketing business continued to contribute the largest portion to its revenue during the year, growing 24% YoY to INR 370.1 Cr. Meanwhile, its flight ticketing revenue also witnessed a significant 43% jump YoY in FY24.

The startup said that its gross transaction value (GTV) crossed INR 10,000 Cr during the year, growing 38% YoY.

ixigo’s group CEO Aloke Bajpai said that the startup expects its trains segment to grow in the mid-teens in terms of volume for the next few years, given the organic acquisition of users and new features and product pipeline. 

Meanwhile, after staying more conservative in its branding and ad spending over the last decade, ixigo has increased its spending in this bucket. Its ad and branding expenses more than doubled to INR 55.2 Cr in FY24 from INR 21.4 Cr in the previous year.

Its March quarter performance was also strong on a YoY basis with net profit rising 55.2% YoY to INR 7.4 Cr in the quarter and operating revenue up 20.4% YoY to INR 164.8 Cr.

After a sharp jump during the early trading hours, ixigo shares shed some gains and were trading 4.7% higher at INR 171.7 by 12.40 PM IST.

ixigo made a stellar debut on the Indian bourses last month. It listed on the BSE at INR 135 apiece, 45.16% higher than its issue price of INR 93.

Currently, ixigo shares are trading almost 30% higher than their listing price on the BSE.

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Recently-listed online travel aggregator ixigo posted a 212% jump in its net profit to INR 73.1 Cr in the financial year 2023-24 (FY24) from INR 23.4 Cr in the previous fiscal, helped by a steady growth across its business verticals.

ixigo’s operating revenue increased almost 31% to INR 655.9 Cr in the reported fiscal year from INR 501.2 Cr in FY23.

Founded in 2007 by Aloke Bajpai and Rajnish Kumar, ixigo earns revenue from selling various travel services like flights, trains, bus tickets, hotel bookings, and holiday packages. The train ticketing segment continued to be the biggest revenue contributor, with its revenue surging 24% to INR 370.1 Cr in FY24 from INR 297.8 Cr the previous year. 

On the other hand, ixigo’s flight ticketing revenue also improved 43% year-on-year (YoY) to INR 146.4 Cr in FY24. The startup’s bus ticketing revenue increased almost 66% YoY to about INR 132 Cr in the year under review.

Commenting on the FY24 earnings, ixigo group CEO Bajpai, said, “FY24 has been a super productive year as we crossed 480 Mn annual active users cumulatively across the group and surpassed INR 10,000 Cr in GTV (+38% YoY). The synergies from our acquisitions have started to play out on our train and bus businesses. We have also improved our ancillary attachment rate rapidly to over 31%.”

“Our playbook of building the best customer experience for travellers has helped us continue our robust growth trajectory of  38% growth in our GTV and 30.8% growth in our revenue from operations. We have also hit double-digit adjusted EBITDA margins in Q4 and gained market share in all three key verticals of flights, buses and trains during the year despite limited capacity growth in the overall market during the quarter,” he said in a statement.

Meanwhile, the startup’s net profit rose 55.2% to INR 7.4 Cr in the March quarter (Q4) of FY24 from INR 4.7 Cr in the year-ago period. Operating revenue increased 20.4% to INR 164.8 Cr from INR 136.9 Cr in Q4 of FY23.

Ixigo’s net profit stood at INR 30.6 Cr in the preceding December quarter of FY24, while revenue was at INR 170.5 Cr. 

ixigo said its monthly active users grew to 76.78 Mn in FY24 from 62.83 Mn in FY23.

ixigo’s group co-CEO Kumar said, “The scale of users we now serve is mind-boggling with 95.6 Mn passenger segments booked in FY24. Our flight business has outperformed with 77% YoY growth in passenger segments.”

Kumar also reiterated that ixigo is now leveraging GenAI to expand its AI capabilities and enhance its efficiency and customer experience. With the launch of its hotels segment, now there is further scope to cross-sell and up-sell to its user base.

Ahead of its earnings announcement on Thursday (July 4), shares of ixigo jumped 4.8% to end the session at INR 163.95 on the BSE. 

Zooming Into Expenses

As per the company’s P&L report, ixigo’s total expenses jumped almost 30% to INR 627.8 Cr in FY24 from INR 484.3 Cr in the previous year.

In that, the startup spent INR 141 Cr on employee benefit expenses, which increased 11.6% year-on-year (YoY). 

Meanwhile, its other expenses increased 36% YoY to INR 471 Cr during the year under review. ixigo did not provide a breakup of the other expenses.

Ixigo, in a separate filing, said that its advertising and branding expenses witnessed a major jump, increasing to INR 55.2 Cr in FY24 from INR 21.4 Cr in the previous year.

Speaking on this jump in ad expenses, Bajpai said it was in line with ixigo’s plans to grow its unaided brand recall and build more trust with the next billion users for all the core categories. 

“… in the first 10 years of our existence, we spent very little on brand marketing. We recognise that in the consumer ecommerce space, brand spends should be seen as an investment for the longer-term salience of the brand, and hence we have done three major activities in FY24. We completed a campaign at Asia Cup for the ixigo brand, we signed Rana Dagubatti as the brand ambassador for ConfirmTkt, and we renewed our partnership with Mahesh Babu as the brand ambassador for our Abhibus brand.”

Company Outlook

In its earnings report, ixigo’s Bajpai said that the startup expects the trains segment to grow in mid-teens in terms of volume for the next few years, given the organic acquisition of users and new features and product pipeline. 

“As for selling more buses and flights within our ecosystem, there is clearly further scope to do that over time, but this shall be a slow and gradual process of discovering better product marketing hooks and customer retargeting,” said Bajpai.

On the flights side, he said that there has been slow growth in the overall market.

“As our brand gains trust and distribution deals play out, we expect to continue growing faster than the overall market at the flight passenger segment level. However, we may have to spend a little on first-time booker discounts, performance and brand over time to fuel this further, leading to slower growth on the revenue and CM (contribution margin) lines compared to the GTV line,” he said.

“All in all, we foresee growing faster than the overall OTA market for the foreseeable future, though the overall market growth may slow down a bit this year,” Bajpai added.

ixigo made a stellar debut on the Indian bourses last month. Its shares have gained over 21% since listing.

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