India may benefit from China’s regulatory crackdown, says Ola chief
Founders of one of India’s largest start-ups are taking advantage of “unique opportunities” to attract foreign investors to domestic entrepreneurs as regulatory turmoil threatens China’s global funding. I urged you to do so.
Babish Agarwal, CEO of Ora, a ride-sharing group backed by SoftBank, said startups are investing in India as Beijing’s crackdown wipes out billions of dollars in value from major Chinese companies. He said India’s benefits should be announced.
“In general, India, unlike China, is a much more rule-based, market-driven economy,” he said. “It is incumbent on Indian entrepreneurs to truly engage with investors and tell them both about their business and about Indian history.
“Investors are getting smarter about the opportunities in India, which have a different texture than China, but are very similar in size,” he added.
Funding for Indian start-ups has jumped this year. According to data provider Tracxn, the company raised a record $ 13.7 billion from a record $ 7.2 billion in the third quarter of 2021.
Ora’s electric vehicle unit raised $ 200 million last week from investors such as Softbank and New York-based hedge fund Falcon Edge Capital, which was worth $ 3 billion.
The Indian public market has also been bullish for 18 months, supported by a steady influx of foreign investors in August and September.
While the country has long been the second country behind China as an investment destination, entrepreneurs are expected to overtake China in the coming years, with stable comparative regulation, accelerated digital adoption and the country’s population growth. ) Wants to change this dynamic.
Many Indian tech companies, such as hotel booking platforms Ola and Oyo, plan to take advantage of the bullish mood by launching in the coming months. Aggarwal said the company “definitely” expects a first public offering by the end of next year, but declined to comment further.
According to people familiar with the matter, Ora is preparing to submit registration documents and is seeking to raise $ 2 billion in funding.
The core of the company’s carpooling activity saw a sharp decline in mobility in 2020, and again this year in India. Second brutal wave. Aggarwal said the company had returned to pre-Covid levels and was profitable.
Ora is also expanding into the production of electric scooters and plans to start shipping the S1 model from this month.
India is the world’s largest market for motorcycles, and cheap and functional models dominate the market where cars remain affordable for many. Indian authorities have announced a series of grants to encourage the switch to electricity beyond gasoline-powered cars to tackle the world’s worst air pollution levels.
However, Aggarwal’s ambitions face many challenges. So-called gig economy companies, such as food delivery groups Zomato and Ola, which treat drivers as independent “partners” rather than employees, face constant pressure to improve the situation. .
The important infrastructure for electric vehicles, including charging points, remains underdeveloped, but Aggarwal said this will continue as the market grows.
“The surrounding infrastructure is also driven by the power of the market… As consumer demand increases, so does the charging ecosystem,” he added. “We believe that the market and consumers are ready to adopt electric vehicles all at once, especially in the area of motorcycles.
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