“Bhavish is one of the most talented entrepreneurs in India today,” says Avnish Bajaj, managing director at Matrix Partners India, an investor in ANI Technologies Pvt. Ltd, which runs Ola.
“Just how many people can stand up against an investor like SoftBank?” asks a person who has worked with him, requesting anonymity, referring to Aggarwal’s battle with the Japanese investor who holds around a 26% stake in Ola. A conflict that came up yet again last week with reports on why the 33-year-old refused a billion-dollar investment from SoftBank, the Godfather of the Indian startup ecosystem.
Hustle brought in the company
But just guts and grinding will only take you so far. “He has worked hard and hustled, and that hustle has brought the company where it is today. But it may not take them to the next level. You need a different playbook, a different approach,” this person added.
Bengaluru-based Ola (ANI Technologies Pvt. Ltd), currently the market leader in India, and its founder have set their sights on an IPO within the next four years. And to get there, the company has gone into overdrive.
In March alone, it announced hundreds of millions of dollars worth of investments in new businesses—from “self-drive” (read car rentals) to “electric mobility”. And raised hundreds of millions more from new and existing investors. All aimed at turning the startup into a “mobility” company—not just a cab aggregator.
At the core of this strategy is a new bet on electric vehicles. Last month, the company announced that its EV subsidiary has raised $56 million from existing investors Tiger Global Management and Matrix Partners. Plus, Ola itself raised $300 million from South Korean automakers Hyundai and Kia as part of what it called a strategic partnership to work on developing India-specific electric vehicles and—more importantly—infrastructure.
This, in a country where almost every attempt to roll out electric vehicles at scale has either failed or been quietly abandoned. Including Ola’s own pilot in partnership with Indian auto firm Mahindra & Mahindra (M&M). And the government’s policy reversals (more on that later) haven’t helped.
Ola’s not alone in this—around the world, ride-hailing firms from Didi Chuxing in China to Grab in Southeast Asia to Lyft and Uber (which competes with Ola in India) in the US have launched a series of EV projects and announcements. Over the years, many of these, too, have petered out. But in the past few months, all of them have been back at it.
Can Ola and Co. get it right this time around?
Back in the saddle
Ola’s first dive into the EV pool was with a “multi-modal” electric pilot in Nagpur in 2017, in partnership with Mumbai-headquartered automaker M&M. The project included 200 vehicles—electric cars, electric auto rickshaws, electric buses—rooftop solar installations, charging stations, and battery swapping points.
All in all, Ola spent $8 million on the pilot, but it hit a snag—no driver was interested in the company’s newfangled EVs, as The Ken reported earlier.
Multiple roadblocks at once
According to a Reuters report last year, nine months after the project started, it hit multiple roadblocks. Only 22 of the promised 50 charging points were installed. Many drivers had either returned their vehicles and changed to diesel or were planning to do it, unhappy with long wait times at charging stations and high operating expenses.
“It is a pilot and there will be learnings for the company. There could be multiple reasons why drivers are returning vehicles,” says the person quoted earlier. “One, they are used to ICE (internal combustion engine) platforms and here they have to deal with EVs. These are behavioral shifts. You also need to understand that the country is not completely ready for EVs at this point.”
However, Ola, insist company executives and analysts, is dead serious about EVs. Its Mission Electric commits to bringing 1 million EVs on Indian roads by 2021. (A tough ask, given that while EV sales doubled to 56,000 units in the year ended 31 March 2018, they accounted for less than 2% of the 3.3 million passenger vehicle sold.) And through its Electric Mobility subsidiary, as well as the tie-ups with Hyundai and Kia, Ola seems to be confident that the solution lies in tech tailored to its own use cases.