Startups, when they raise venture money to build their businesses, begin with a Series A round and then proceed through Series E, F or maybe G before going public. The Indian ride-hailing service Ola is a bit unusual: It just completed its Series J fundraising and is marching toward Series K, a letter almost unheard of by researchers that track such things.
The 33 old founder of Ola, Bhavish Aggarwal recently turned down a $1.1 billion investment from SoftBank Group Corp. This decision was taken keeping in mind the independence of the company as SoftBank who holds a stake in the arch-rival company Uber Technologies has been encouraging the rivals to merge.
According to people who are familiar with this matter, Masayoshi Son who led this Japanese conglomerate struck a preliminary deal to put another $1.1 billion into Ola to boost his stake to more than 40%. But the deal fell apart as Agarwal tried to include terms to guarantee his own control over the startup.
Aggarwal in this year only has managed to get $300 million from Hyundai Motor Co. and about $90 million from Sachin Bansal, co-founder of Flipkart Online Services Pvt as an investment.
Mohandas Pai, Venture Capitalist and Former Chief Financial Officer of Infosys Ltd said, “Bhavish is spurning SoftBank money as he doesn’t want to get diluted out of Ola,”
He added that “Founders become employees when someone sits on your board and tells you how to run the show.”
In the official statement given by both the companies they refused to comment on this matter and presented the same front.
The spokesman for Ola said in the statement “Softbank has been a great partner for us as we’ve grown our business. There are so many emerging synergies with SoftBank that we envisage in the years to come, as we continue to build a global mobility business out of India.”
The SoftBank spokeswoman said “We enjoy a cordial relationship with all our portfolio companies, including Ola. Beyond this, we do not comment on specific individuals and internal matters.”
Aggarwal and Son who once shared a warm relationship don’t see each other eye to eye now.
In early 2014 when Agarwal was asked about Son, he said “He is inspiring and aggressive and a visionary. He is making history”
,whereas as recently as now Aggarwal has been avoiding gatherings with Son and portfolio companies on their visits to India.
With this deal blowing off, the merger talks of Uber-Ola have also subsided but Aggarwal is sure and expecting Uber and SoftBank to come after him and his company again which is why the company has become prudent with its spendings as to protect his business in the future.