Catamaran Ventures Expresses Interest in Joining Ola Electric’s $300 Million Funding Round
- ByStartupStory | June 9, 2023
According to reports, Ola Electric, the electric scooter manufacturer led by Bhavish Aggarwal, is nearing the completion of a funding round following extensive negotiations. Sources have revealed that Temasek, a prominent Singapore-based private equity firm and an existing investor in Ola Cabs and Ola Electric, is set to invest around $100 million in the company.
It has been reported that Bhavish Aggarwal is in discussions with Catamaran Ventures, the investment firm established by NR Narayana Murthy, the cofounder of Infosys. The exact amount of investment Catamaran will make in Ola Electric remains uncertain, but various media reports and industry speculations suggest it could range between $100 million and $150 million. SoftBank, the largest institutional stakeholder of the electric scooter manufacturer, is expected to abstain from the upcoming funding round. While earlier speculations revolved around the participation of Middle Eastern funds or global private equity players, the likelihood of their involvement has diminished.
During the current funding round, Ola Electric has set a target of raising $300 million, leaving approximately $50 million available for another potential investor. In a recent interview with Bloomberg, MD Ranganath, the chairman of Catamaran, stated that the venture capital firm would prioritize investments in the manufacturing sector.
Catamaran is also keen on exploring opportunities in renewable energy, precision engineering, and deeptech. Ola Electric aligns well with these investment criteria, as it not only manufactures electric scooters but has also made significant investments in cell development, with plans to manufacture battery cells in the future.
To summarize, Ola Electric has reportedly secured $300 million in funding from undisclosed investors. However, the funding round is still ongoing, and it is expected that Temasek and Catamaran will play a leading role in this significant round of funding. According to recent media reports, Ola Electric intends to utilize the raised funds to increase its manufacturing capacity to 2 million scooters per year, a fourfold increase from the current capacity of 0.5 million scooters.
Approximately 18 months ago, Ola Electric raised $200 million in its previous funding round, valuing the company at $5 billion as of January 2022. According to sources mentioned by ET, the upcoming funding round could potentially value the company between $5 billion and $6 billion, aligning with media reports from May this year. Ola Electric has maintained its dominant position in the Indian market for electric two-wheelers, as evidenced by a record-breaking 28,438 registrations in May 2023, based on data available on the Vahan portal as of June 1. This represents a significant increase of over 29% compared to the 21,991 units registered in April.
The startup led by Bhavish Aggarwal, along with several other industry players, had been under government investigation for allegedly categorizing their escooter chargers and proprietary software as separate accessories in order to qualify for FAME-II subsidy. As a result, Ola Electric was reportedly required to reimburse INR 130 crore to 100,000 Ola S1 Pro customers.
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