OLA & TAXI FOR SURE

Section D
GroupS.No.
1.
2.
3.
4.
5.

Name Of Student
Amit Sohrot
Anurag Mathur
Kunal Desai
Shivani Garg
Sumeet Kumar

Roll No.
2015197
2015202
2015211
2015246
2015252

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Table Of Contents
Contents
Table Of Contents.................................................................................................. 2
INTRODUCTION...................................................................................................... 3
1.

OLA cabs...................................................................................................... 3

2.

Taxi for sure.................................................................................................. 3

3.

Motive For M & A.......................................................................................... 4

Financial Analysis................................................................................................... 4
a)

OLA Cabs................................................................................................... 4

b) TaxiForSure................................................................................................ 5
c)

The Acquisition......................................................................................... 5

d) Deal For Acquisition.................................................................................. 6

Merger & Acquisition Ola & Taxi For Sure...............................................................6
5.

Mode of Payment.......................................................................................... 6

6.

Benefits from this Merger............................................................................. 7

7.

Offered and Acceptance...............................................................................8

Merger and Acquisition Analysis...........................................................................8

8.

Funding Analysis.......................................................................................... 8

9.

Synergy Benefits........................................................................................ 10

10.

Market Share........................................................................................... 10

References........................................................................................................... 10

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INTRODUCTION

1. OLA cabs
Ola cabs or commonly known as Ola. It is an network transport
company established on 3 December 2010 by Bhavish Aggarwal, who
currently is the CEO of the company. The company is currently based in
Bangalore, it started its online cab aggregator in Mumbai, Currently based
in Bangalore and is among one of the fastest growing business in India.
Ola uses the business model of Uber. From the date of its establishment to
2014, Ola has over 2,00,000 taxi over 85 cities in India. A network that
has expanded dramatically over a period of time. The company also
expanded it auto- trial business, in cities like Bangalore, Chandigarh ,
jaipur and New delhi. It was valued at $5 billion dollar in September 2015.
As far as providing service is concerned, Ola cabs are reserved by
means of mobile Apps, Ola provides service in range of economic to
luxury travels, that is if you opt for economy service, the Taxi or the cab
which will come at your door step will be costing you less as compared to
luxury services, that means Air conditioned and diesel will be the
differentiating factor, apart from this it also offers both cash and cashless
payment option to his customers, that is the Ola money ,these all are the
differentiating factor that the company posses, by this Ola cabs has
gained the majority of market share in recent time. Ola claims to have an
average of 1,50,000 reservation done per day, and by the year 2014 it
was the owner of about 60% of market share in India. Recent data suggest
it had gained about 80% of market share.
On 25 th june 2015 Ola acquired the company Taxi for sure by
means of acquisition, a acquisition worth $200 million by means of equity
deal on 2nd March 2015, from then onwards, Ola users have an access of
Taxi for sure cabs via Ola mobile app.

2. Taxi for sure

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Taxi for sure is a taxi aggregator company, established in June 2011 by

two Aprameya radhakrishna and Raghunandan G. in Bangalore. The
company provide facility to book cab through mobile Apps , through it
website and also by means of calling as well. In October 2013, taxi for
sure also started providing airport service to customers in Delhi and
Bangalore. By 2014 TFS expanded its operations to different cities. Cities
such as Ahmedabad, Udaipur, Mysore, Surat and Pune.
As far as service is concerned Taxi for sure provides luxury vehicles
to the customer who want to have. Recently it also started the autorickshaws on call through the TFS app.
It was acquired by Ola cabs last year, by means of equity deal, a
$200 million deal, after which the company has continued to operate as a
separate entity, and is headed by CEO Arwind singhal, recent data
suggest that 4 out 36 cities has Taxi for sure as services merged with Ola
cabs.

3. Motive For M & A

Ola cabs acquired Taxi for sure with a cash and equity deal of
$200 million, with this deal as Ola were already a market leader with over
1 lakh vehicle. It deepened its root in the market as Taxi for sure operating
in over 47 cities and with over 15,000 vehicle registered in the business.
Ola was able to have a command over the market. After the deal that is
the acquisition.

Taxi for sure and Ola cabs continued to operate as separate entity,
as it was acquisition not a merger.
The employees of Taxi for sure remained the employee of Taxi for
sure only, which were about 1700.
This acquisition added value to both demand and supply of Ola cabs
and Taxi for sure.
Their combined entity became strong and they had better capital to
offer to their stakeholders.
Investors of Taxi for sure put their in Ola.

Financial Analysis

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Looking at Financial analysis of both the Companies separately before

M&A followed by the results seen after the same.
a) OLA Cabs
The ANI Technologies, which Is the parent company of Olacabs, has got
financial support from venture capitalist such as Tiger Global, Matrix
Partners etc. The company raised Rs.250 Crores in the first round of
funding in July 2014. That gave the confidence and helped them beating
the competitors.
In April 2015, the company raised $400 million in a funding round led
by DST Global.
The Company raised Rs.1281 Crores in another round of funding which
was led by SoftBank from Japan investing $210 million and the
existing investors. This was the unprecedented amount that was raised by
an online aggregator in the country.
The Company has raised $500 million in fresh funds from new and
existing investors. Funding is done by investment management firm
Baillie Gifford, Chinas largest taxi-hailing service company DidiKuaidi and
existing investors Falcon Edge Capital, Tiger Global, SoftBank Group and
DST Global.
The company had received about $225 million as part of a $500 million
funding rounda deal it was expected to be value the firm at nearly $5
billion. With the current round, Ola has closed over $1.3 billion of external
funding, of which over $1.2 billion has been raised over the past year.
b) TaxiForSure
Initially the company raised its fund through seed funding in May 2012,
the amount is expected to be around $5 million for which the investors
were not disclosed.
In June 2013, the company raised fund through Series A funding of $4
million, the funding were performed by 3 investors led by Accel and other
investors were Helion Venture Partners and Blume Ventures.
Series B round of funding was done by Bessemer Venture Partners
which invested $ 10 million in the company, the funding took place on
April 18,2014 and it was a venture funding as previous. This made the
total investment amount of the company to $14 million
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In Series C round of funding which took place in August 20,2014 There

were 5 investors involved and the funding was led by Accel India
Ventures which is the indian subsidiary of Accel. The company
raised $30 million in the third round of funding.
But still the momentum was in the favor of Ola due to the $210 million
investment done by SoftBank Group. So the company was also about to
raise the investment of $200 million in its another round through a group
of 20 investors in US but the deal could not succeed.
c) The Acquisition
In order to counter its business rival Ola, TFS also decided to fight the
price war, which led to loss of Rs 36 Lakhs per day leading to Rs 11 Crore
loss in the month on November 2015, But was beaten the war by Ola
since it has got large invested capital and hence TFS did not left with
enough money to carry its operations forward. It is now acquired by
OLA.
d) Deal For Acquisition
The deal was about $200 million in mostly stock-swap with a swapping
ratio of about one Ola share for seven TaxiForSure shares.
The owners received Rs 100 Cr. each are mostly paid in Cash, each
owns 5.5% in the company, and shall exit the company.
Taxi For Sure venture capital investors will roll over their shares into
the combined entity and take a small portion of the consideration in cash.
Most of the shares held by TFS investors are getting rolled over to Ola as
they did not agree to a complete share deal. Around 20% of the deal is
cash.

Merger & Acquisition

Ola & Taxi For Sure
4. Type of Merger
The merger of Ola cabs and Taxi for sure was a Horizontal merger. A
merger occurring between companies of the same industry. Horizontal
merger is the consolidation of business that occurs between companies
who operate in the same space.
Since both the companies Ola and TaxiForSure work as a cab service
provider and thus both the companies belong to the same category of
service and that is why they come under horizontal type of merger.
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5. Mode of Payment
Ola acquired Taxi For Sure, in a $200-million (Rs 1,200 crore) cash and
equity arrangement. Ola cab is already a leader in the personal
transportation market scenario with a valuation exceeding $1 billion (Rs
6,000 crore) and also over 100,000 vehicles for the service ,has become a
stronger entity through merger with Taxi For Sures operator and service
model. Taxi for sure operates in 47 cities, with at least 15,000 vehicles for
service.

Fig: Showing Total Financial Position of TFS.

6. Benefits from this Merger

With this merger of Ola cab and Taxi for sure, both the companies derived
benefits
The operators were benefited because of being the part of this
system and an increased demand of scale.
Now it's easier for Taxi For Sure to focus on creating values to the
consumers and drivers instead of worrying about competition
Taxi for sure now can save raising capital for organizational
resources and for various different activities.
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 With the different supply chain and distribution model Ola will be
benefited a lot through this merger.
Ola now has the chance to focus on economy segment cab
consumers.
With this merger of Ola and Taxi for sure, Ola will has an access to
the second-largest network of cabs.
They can now enter in innovative categories like Nano and autos.
This merger of Ola and taxi for sure helps in synergies that will
benefit customers and driver partners who are both key to the
system
There will be a better experience and also more availability in the
market place model owing to the complimentary value in terms of
drivers, customers and other stakeholders.
This merger also gives both brands an opportunity to work together
to allow only verified, high quality, well trained drivers who have
clean records and good overall performance

7. Offered and Acceptance

The deal started with $26 million and was raised to $60 million by
TaxiForSure. They offered $60 million to Ola which again kept on
increasing and finally the deal was done at $200 million.

Merger and Acquisition

Analysis
Ola and Taxi For Sure was more of acquisition, and not merger as it
seems to be the trend among Indias online consumer businesses the
buyers have chosen to let the acquired entity exist and operate
separately. Ola and Taxi For Sure has done the same as they were
spending a lot in competing with each other rather than adding value to
stakeholders.
Here the Market Multiple Analysis (MMA) Method is used for the M&A
as both the companies OLA and TFS are comparable industries. This
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method was also applied as both companies have same kind of market,
customers,
growth,
leverage
and
also
technology
used.
This analysis also boils down to analysis of acquisition price. This will bring
the 4 main types of price& value addition toOla: Value addition of TFSs
Shareholders, Acquisition Premium of TFS, Book Value of Equity of TFS and
also add the Goodwill that TFS has earned (i.e.) Market Price of Equity
(Pre-Merger)

8. Funding Analysis
According to The Economic Times, the Indian taxi market is worth almost
$9 billion. It is one of the fastest growing markets, attracting investors
across the globe.
Ola Cabs operates in around 67 Indian cities and has received about $277
million in funding in 5 rounds. Backed by these investments and a rapid
growth, Ola is now a direct competitor to San Francisco based car service
Uber
Technologies
Inc.
in
India.
Olas funding, revealed in a regulatory filing, showed DST Global
contributing 400$-500$, alongside Tiger Global with $41m and smaller
amounts from others including Silicon Valley-based funds Accel Partners
and Steadview Capital.
And it was also in news that Funding round not yet finished in 2015 Q1
saw over $1.7 billion funding in Indian startup ecosystem and the second
quarter seems to carry the momentum forward. Within six months of
raising $210 million in series D round of funding, Ola then announced its
Series E round of funding of $400M. This investment round is led by DST
Global with participation from GIC, Falcon Edge Capital and existing
investors. This takes the total funds raised by the company to over
$675M. This round is also set to raise the companys $2 billion valuation
by
a
good
amount.
More over Aggarwal says that the companys new injection of funding will
primarily increase its supply chain that means more staff for nationwide
expansions, and more drivers. Beyond simply signing drivers up with
lucrative offers, the Ola Cabs CEO says that the company is empowering
drivers to become entrepreneurs themselves.
These funding has given Ola a clear edge to compete against their real
competition, Uber Technologies as Asias smartphone boom catalyzes the
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rise of services across business sectors, from mobile shopping to booking

restaurant tables to personal transportation
Following are the stats that shows the different types of funding
with amount that Ola received in different years. The Stats clearly
depicts that the funding of Ola has increases drastically after its
merger with TaxiForSure.

9.

DATE
Nov 18, 2015

TYPE
Series F

AMOUNT
275M

Sep 13, 2015

Series F

225M

Jul 1, 2015

Equity

100M

Apr 8, 2015

Series E

400M

Oct 25, 2014

Series D

210M

Jul 10, 2014

Series C

41.8M

Nov 13, 2013

Series B

20M

Aug 1, 2013

Series B

3.2M

Apr 10, 2012

Series A

7.7M

Apr 21, 2011

Angel

Undisclose
d

DATE
11/18/201
5
09/13/201
5
07/01/201
5
04/08/201
5
10/25/201
4
07/10/201
4
11/13/201
3
08/01/201
3
04/10/201
2
04/21/201
1

Synergy Benefits
Post this acquisition; the combined entity will be strong and capitalized to
offer the best value to all their stakeholders, including their customers
10.

Market Share

At present we can see the standings of all the taxi owning companies as
follows:-

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Fig: Market Share of Taxi Companies

Clearly we can see that Ola is market leader with 60% of total market
share at present after acquiring Taxi For Sure.

References

https://www.crunchbase.com/organization/ani-technologies#/entity
http://www.livemint.com/Companies/fYl2UUOUQyWFcCaQ3rec1O/Ola-raises500-million-in-fresh-funds-from-Chinas-Didi-Kua.html
https://www.crunchbase.com/organization/taxiforsure-com#/entity
http://www.livemint.com/Companies/t7TozTlZCAmvtSxog3OQ7L/BehindTaxiForSures-sellout.html
http://www.ibtimes.com/ola-cabs-acquires-rival-taxiforsure-quest-millionrideshare-cab-drivers-india-1832478
http://timesofindia.indiatimes.com/business/india-business/Olacabs-buysBengaluru-rival-TFS-for-Rs-1260-crore/articleshow/46438072.cms
https://www.owler.com/iaApp/142235/olacabs-company-profile?
onBoardingComplete=true
http://www.vccircle.com/news/technology/2014/11/19/ola-now-has-250-300mannual-gross-transaction-run-rate-peek-its-numbers

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