Ola shuts its international operations in UK, Australia and New Zealand: Report

SoftBank-backed ride-hailing giant Ola is reportedly winding up its operations in the UK, Australia and New Zealand, almost six years after expanding its services to international markets. The company trying to focus more on its domestic business ahead of an initial public offering, an OLa spokesperson said, TechCrunch reported.

The firm has started sending notifications about its closure to users, confirming that its operations will stop in Australia from April 12. Ola was founded by Bhavish Aggarwal and Ankit Bhati in India in 2011. The company had initially launched operations in Australia and New Zealand during the year 2018.

It was a direct competitor of Uber and was available to customers in Sydney, Melbourne, Brisbane, Gold Coast, Perth, Adelaide and Canberra. 

Ola scaled back its operations across Australia in late 2020, with major staff redundancies and shutting down local driver offices. 

The company has also been silent on its Australian social media accounts, with no new posts since mid-2021.

The spokesperson said the SoftBank-backed ride-hailing startup sees “immense opportunity for expansion in India,” where it operates in hundreds of cities and offers a range of transportation options, including two-wheelers.

“The future of mobility is electric - not just in personal mobility, but also for the ride-hailing business and there is immense opportunity for expansion in India. With this clear focus, we’ve reassessed our priorities and have decided to shut down our overseas ride-hailing business in its current form,” a spokesperson said.

Valued at $5.4 billion in a recent funding round, Ola is among the most high-profile startups in India and is backed by majors like Temasek, Tiger Global and Warburg Pincus. The startup in December last year filed a draft red herring prospectus (DRHP) which is looking to raise up to Rs 5,500 crore through a fresh issue, apart from a sale offer of 95.2 million shares by existing investors. 

As per its DRHP, Ola Electric's founder Bhavish Aggarwal plans to sell up to 47.4 million shares, according to the draft papers dated December 22. Aggarwal had also invested Rs 45 lakh in Pune-based EV startup Tork Motorcycles.

The issue is being made through the book-building process, where in not less than 75 per cent of the issue shall be available for allocation on a proportionate basis to qualified institutional buyers (QIBs), not more than 15 per cent of the issue will be available for allocation to non-institutional investors (NIIs), and not more than 10 per cent of the issue shall be available for allocation to retail individual bidders.

 As per the DRHP, net proceeds of up to Rs 1,226.4 crore from the fresh issue will be used for capital expenditure to be incurred by the subsidiary, Ola Cell Technologies (OCT) for the Ola Gigafactory project. Along with this, Rs 1,600 crore will be used towards investment into research and development (R&D) and Rs 350 crore will be utilised for organic growth initiatives and general corporate purposes. Additionally, Rs 800 crore will be used to repay/pre-pay the indebtedness incurred by subsidiary, Ola Electric Technologies (OET).