Indian Uber rival Ola has raised $500 million, the start-up said on Wednesday, valuing the company at $5 billion, according to industry sources, as it looks to fend off competition from its U.S. opponent.
The latest round of funding will help the taxi app – which is the leader in the Indian market – to "accelerate its growth" at home by "innovating mobility solutions for the local market", the company said in a press release.
Ola has now raised over $1.3 billion of external funding, it said, with $1.2 billion coming over the past year.
New investor Baillie Gifford led the latest funding round with existing investors Falcon Edge Capital, Tiger Global, SoftBank Group and DST Global all on board. Didi Kuaidi, China's Uber rival which is a strategic investor in Ola, was also involved in the funding round.
Ola also announced that it is now receiving over one million booking requests a day, though it did not say how many rides it actually completes. The Indian start-up has 350,000 vehicles registered on its platform and is present in 102 cities in India.
Uber carries out around 200,000 trips a day in India, according to media reports, and is operational in 22 cities.
India is becoming a big battleground for taxi apps with firms very bullish on the growth potential as the domestic smartphone market continues to grow rapidly. In July, Uber – which is valued over $50 billion – said it was . After that investment, it said it expected to hit "over a million trips a day in the next six to nine months".
But Ola has been looking to leverage its local knowledge, introducing services tailored to the Indian market. Ola was first to offer cash payments for its rides while Uber followed recently. Ola also offers cheap rickshaws on its platform and has bigger access at the moment to smaller cities. Both taxi app services have a carpooling feature.
Ola also has its own payment app called Ola Money as it looks to expand its services beyond transport. The start-up's co-founder said the latest funding round will be used to further expand these services.
"As we pursue our mission to build mobility for a billion people, we are excited about bringing onboard partners who can help us get there faster," Bhavish Aggarwal, CEO of Ola, said in a press release.
"We will continue to build for the local market through innovative solutions like Ola Share, Ola Prime and Ola Money, as we grow the mobile ecosystem in India."