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Ola Enters A New Market With A Rs 700 Crore Investment In Bangalore-Based Vogo

| Published on December 19, 2018

Ola today announced about its $100 million (Rs 700 crore) investment in the Bangalore-based start-up Vogo. This seems to be a huge step taken by Ola in diversifying its mobility portfolio.

What is Vogo?

Vogo is a Bangalore based start-up that lets you rent gearless scooters on the go. It is currently live in Bangalore and Hyderabad. It was founded in 2016, and since has raised $8 million to this date.

Even though India’s scooter hailing market is still in its nascent stages, Vogo seems to be the most promising brand in the sector. It offers high-quality gearless scooters at just Rs 1.2/min. With the wait time involved in hailing cabs and traffic, rented scooters available at such a low cost seem like a good option for a daily commuter.

With the traffic conditions in India, it is evident that two-wheelers are the fastest approach to short commuting and with its market strategy, Vogo seems to be making good use of these factors. Installing new pick-up and drop sites, Vogo has scaled rapidly, growing 10 times in the last five months.

With Vogo’s scooter sharing platform and Ola’s market expertise and customer base, this venture seems to be at the forefront of India’s rapidly growing micro-mobility market. But with China’s history in the same sector, it still seems like a gambit.

The problems that may arise is lack of enough pick-up and drop sites. Others include misuse of the vehicles on rent and people dropping the scooters wherever they feel like. Just like the problems China faced. Or if the Indian government thinks of imposing a scooter ban like the one about to be implemented in Los Angeles, this could be a huge problem that Ola will have to face.

What’s in it for Ola?

Well, with this investment, Ola has branched out into a completely new market. Ola’s two-wheeler taxi services are very different from the services provided by Vogo. Ola is charting brand new territory here. But still, being in the mobility game for such a long time, Ola can be really useful in expanding Vogo into a nation-wide brand.

Apart from a big investment, Ola has also taken a $100 million stake in India’s scooter hailing market, which is in its nascent state. If the scooter rental market goes on to play a vital role in India’s micro-mobility market, it will put Ola in a better position than its American rival, Uber.

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