Ola Cabs acquires Taxi For Sure for cash and stock deal. Ola Cabs owned by Mumbai based ANI Technologies have acquired Serendipity Infolabs Pvt Ltd that runs rival services Taxi For Sure for $200 million (Rs. 1,250 crores) in cash and stock deal.
Ola Cabs one of the top players in online radio taxi provider and was competing with Taxi For Sure and pitched against each other. Both companies were against the mammoth Uber and other local players like Meru Cabs.
The fine print of the deal will be published shortly in next 10 days. Mutual memorandum of understanding has been inked for the same. Taxi aggregators are already in talks to form an international alliance by linking up Olacabs, Singapore’s GrabTaxi and San Francisco based Flywheel against Uber.
OlaCabs was founded by Bhavish Aggarwal and Ankit Bhati recently received $210 million in funding by Softbank, a Japanese communications conglomerate. At the same time Taxi For Sure received $ 30 million from Accel and Qualcomm. Taxi for Sure was in talks with Uber and Carzonrent before saying yes to OlaCabs deal.
However Taxi For Sure, OlaCabs and Uber do not operate their own taxis, they aggregate and link taxi owners and operators with passengers. However this explanation is not accepted by transport department. The transport department is insisting on radio taxi licence for all the radio taxi operators.
The deal may be attractive for OlaCabs since Taxi For Sure works with taxi operators. Whereas OlaCabs and Uber works with drivers directly. Through this deal OlaCabs will get linked with cab operators that are owned by Taxi For Sure.
Uber on the other hand was planning to buyout Taxi For Sure offered cash with some stocks to existing investors in Taxi For Sure. However the deal was struck in favour of OlaCabs due the higher valuation during last round of funding that offered better growth. Compared to the growth in valuation of Ola will grow five times in value for the same period whereas Uber stock which grows two fold.
Uber’s team handling the negotiations stated Taxi For Sure financials were not attractive enough, which is why it didn’t match the offer by OlaCabs.
Both OlaCabs and Taxi For Sure are aggregators of radio taxis have presence in 52 cities and 44 cities respectively. Taxi For Sure offers more out stations trips and Ola Cabs has withdrawn those services long time back.
OlaCabs and Taxi For Sure are among the top five in the radio taxi operators’ space. Taxi For Sure will continue to operate as a separate entity for some time. Arvind Singhal will be heading as Chief Operating Officer being appointed as Chief Executive Officer of Taxi For Sure. Meanwhile Aprameya Radhakrishna and Raghunandan G founders of Taxi For Sure will work on advisory role for some time.
Investors in Taxi For Sure Accel Partners, Helion Venture Partners, Blume Ventures and Bessemer Venture Partners will have minority stakes in OlaCabs. For the customers it is ringing bells with raising of funds, acquisitions and better services combined with offers and discounts offered by both companies.
The acquisition is touted to be next biggest in the world of startups after Flipkart’s acquisition of Myntra last year.