Ola raises $1.1 billion in its latest round of funding

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Indian cab aggregator Ola on Wednesday said it has raised United States dollars 1.1 billion in a round led by Tencent with participation from Japanese firm Softbank and new US-based undisclosed investors.

Ola will make strategic investments in supply, technology and innovations "to build for the country's unique transportation needs". The source also said that US investors will be involved in the second tranche of the funding round. The company said in 2015 that it would invest $1 billion in India that year.

Investor interest in Ola has increased at a time when its rival Uber is facing internal challenges. It added that Ola will invest in technologies like Artificial Intelligence and Machine Learning capabilities. "Our ambition is to build a globally competitive and futuristic transportation system in India that will support and accelerate a nation on the move", Ola Co- Founder and CEO Bhavish Aggarwal said in the statement.

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However, Ola suffered a consolidated loss of over Rs 2,311 crore - about Rs 6 crore a day - during that fiscal on account of heavy advertising, promotional expenses and other costs.

Ride-hailing apps have risen rapidly to become a booming industry in India's congested cities, but face stiff resistance from traditional taxis and bans over safety concerns.

Martin Lau, President of Tencent Holdings, said the strategic partnership with Ola "makes it possible for Tencent to be part of the fast-growing ride-hailing space in the country". Flipkart is now the world's third-most funded private company. Among them, the San Francisco-based firm and its new CEO Dara Khosrowshahi are fighting to continue operating in London - one of Uber's biggest markets - while also going up against Google's Waymo in court over allegedly stolen self-driving auto technology.

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The antitrust cases in India, nevertheless, are set to further intensify the showdown between ride-hailing firms and local players in India's $12 billion taxi market. By doubling down on penetration, Ola intends to go deeper into the Indian market to serve the vast majority of Indians who are looking for affordable and reliable commute and transportation.

Ola says it will use the funding to expand the number of drivers it uses and deepen its presence in India's ride-hailing market, which is reportedly worth $12bn.

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