Ola moves financial unit out of parent ANI Technologies
Ola aims to raise capital separately for the independent entity and will pit it directly against larger rivals like Paytm, Google Pay, PhonePe. Short-term credit, mobile wallet, insurance and utility bill payments are some of the services housed ...
The move, which is a part of Ola’s strategy to aggressively diversify beyond its core ride-hailing business, will pit it directly against larger competitors including Paytm, PhonePe, AmazonPay and Google Pay.
“The company’s board approved the move to hive off Ola Financial Services, which operates Ola Money, recently,” said one of the people cited above.
Short-term credit, mobile wallet, insurance and utility bill payments are some of the services housed under Ola Money.
Ola did not reply to email queries from ET on the development. Earlier in January, ET had reported that Ola had applied for a non-banking financial company (NBFC) licence to offer credit directly from the company’s books and that the ride-hailing app may hive off Ola Money to raise funds independently.
Since then, the Bengaluru-based company claims its micro-insurance platform and credit offering — Ola Money Postpaid — have emerged as significant products in the fintech market but has not revealed estimates of market share in these categories.
“The (Ola Financial Services) business alone is on the path to being IPO-ready in the next three-four years,” said an investor.
Ola Postpaid is already a profitable business, said a second person adding that the product has helped bring in more high-value customers to its taxi aggregation platform. People familiar with the company’s thinking said that over the next few months, it will aggressively grow its credit cards and health insurance segments.
Ola has struck partnerships with Religare for health insurance, Zipcash for the wallet business, and SBI to launch credit cards. “In such a high-compliance regulatory framework, the key to scale in financial services is to strike mutually scalable strategic partnerships,” said one person aware of the matter.
Ola Financial Services is led by former PayU CEO Nitin Gupta. Last week, the company appointed Hemant Kaul, a financial services veteran, to the board of OFS. Kaul was an executive director at Axis Bank until 2009; thereafter, he was the MD and CEO of Bajaj Allianz General Insurance until 2012.
People who spoke to ET indicated that with its core ride-hailing growth stagnating, Ola is betting on electric mobility, financial services and food delivery through cloud kitchens to drive growth and profitability in the long term. Earlier this year, Ola Electric, an independent entity set up in 2017, raised $250 million led by Japanese major SoftBank, joining the ranks of India’s newest unicorns.