Ola Cabs raises fresh funds as it seeks to outrun Uber

Ola Cabs, India's most popular internet taxi app by users, has won fresh funding to accelerate its race against US rival Uber, raising $314m from investors led by Russian billionaire Yuri Milner's DST Global and US-based Tiger Global.

The deal marks the latest stage in an increasingly fierce battle between the two cab-hailing companies, and follows Ola's move to cement its lead with the $200m acquisition last month of local rival TaxiForSure, the country's second-largest taxi aggregator.

It also comes as Ola attempts to take advantage of a series of regulatory snarl-ups that have hit Uber's expansion plans in what has become its second-largest global market by users - most notably a temporary ban in New Delhi at the end of 2014 following allegations of sexual assault against an Uber driver.

Ola's funding, revealed in a regulatory filing, showed Mr Milner's DST Global contributing around $207m, alongside Tiger Global with $41m and smaller amounts from others including Silicon Valley-based funds Accel Partners and Steadview Capital.

A spokesman for Ola declined to comment on the deal or any implied valuation. However, one person with direct knowledge of the matter said the funding round was not yet finished and would ultimately raise around $400m at a valuation of roughly $2.4bn, making the Bangalore-based group one of India's most valuable start-ups.

The latest infusion also more than doubles the total funding Ola has raised since its launch in 2010. The group brought in $210m last October, in a round led by SoftBank, the Japanese telecom group founded by Masayoshi Son, the acquisitive entrepreneur. SoftBank and Tiger Global have been among the most aggressive recent investors in Indian ecommerce.

There has been a near-daily flurry of new deals across India's booming ecommerce sector, which is attracting ever-increasing attention from global investors enthused by rapid increases in internet penetration and online spending.

On Thursday, Urban Ladder, an online furniture retailer, announced that it had raised $50m in a round led by US-based Sequoia Capital. Online classified site Quikr raised $150m earlier this week from investors including Tiger Global.

Taxi hailing has drawn particular attention in India, given the huge size of the country's urban population and the often-dilapidated nature of its public transport.

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Uber has moved rapidly since launching in India in 2013, speeding into 11 cities, but it remains far behind Ola, which operates 60,000 cars in more than 50 urban markets. 

Even so, Uber says it is expanding its number of rides by 40 per cent each month, and has described India as its fastest-growing market.

Both Uber and Ola have been buoyed over recent days by news that India's government is planning new regulations for online taxi businesses, reducing speculation that either service might face further bans for operating outside older rules designed for radio taxis and cabs hailed on the street.

A spokesman for Uber said: "We applaud the transport ministry's vision to create a new regulatory framework specifically designed for [taxi] aggregators."

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