Ola Cabs buys rival TaxiForSure for USD 200 million

App-based cab service Ola has bought rival TaxiForSure for $200 million as it eyes a bigger share in India's fast-growing online taxi services industry, where it competes with local players as well as Uber, the US-based online taxi-hailing company.

TaxiForSure is currently in 47 cities with over 15,000 vehicles registered on its platform.

The deal by Ola, backed by Japan's SoftBank Corp, is among the biggest in India's start-up industry after Flipkart's purchase of Myntra for about $300 million in May last year.

Ola and TaxiForSure will continue to operate as separate entities, the companies said in a statement.

Commenting on the acquisition, Ola Co-founder and CEO Bhavish Aggarwal said: "There's a lot of complementary value in the strategy TaxiForSure has followed. I'm very excited to welcome the TaxiForSure team onboard and look forward to working with them towards realising our common vision. Post this acquisition, the combined entity will be strong enough and better capitalised to offer the best value to all our stakeholders, including our customers."

With the acquisition, investors in TaxiForSure will roll over their stock into Ola. Raghunandan G, chief executive of TaxiForSure, will step down and Arvind Singhal, currently COO, will become its CEO.

"Aprameya Radhakrishna and Raghunandan G, the founders of TaxiForSure, will contribute in an advisory role for a certain period," it added.

The company will retain all of the 1,700 employees.

"This development ensures that industry attractiveness is preserved and the combined entity can race ahead and continue to create unprecedented value for all stakeholders," Raghunandan said.

TaxiForSure follows a different model of supply and distribution by working with cab operators compared to Ola's model of working with driver-entrepreneurs.

Ola has been funded by Tiger Global, Matrix Partners, Sequoia Capital, Steadview Capital and most recently, Softbank over its four rounds of fund-raising.

Investors in TaxiForSure are Accel Partners, Bessemer Venture Partners and Helion Venture Partners.