Ola plans to scale up financial services, logistics, e-commerce businesses
ANI Technologies, the parent company of ride-hailing service Ola Cabs, is looking at building a profitable allied ecosystem riding on next-generation technologies, including AI and cloud.
This includes scaling up various businesses such as ride-hailing, financial services, logistics, and e-commerce in the next few months, according to sources.
“Globally, the ride-hailing industry is going through a lot of transformation and disruption due to new technologies such as AI,” said a person familiar with Ola’s strategy. “The firm is looking at creating a profitable allied ecosystem, which includes ride-hailing, financial services, and e-commerce.”
The company’s vision is to serve 1 billion Indians and drive sustainable growth and efficiency in the organisation. For this, the company is undergoing a restructuring exercise to improve profitability. It has made substantial investments in artificial intelligence and technology.
Ola is leveraging various strategies to transform mobility and ride-hailing and increase growth. This includes premiumisation to further expand the multi-city Prime Plus experience with a loyalty programme and luxury cars on the anvil. It is leveraging electrification to disrupt the mobility space. This includes offering the most affordable rides in the two-wheeler segment, priced lower than the industry and providing more benefits to the partners.
Financial services is another big area. This includes an increased focus on the asset finance vertical with bank tie-ups and better insurance and process experience, with a focus on partners and riders. Ola is also focusing on scaling up logistics and e-commerce services. This consists of a multi-work model combined with the company’s large customer base, financial services offerings, gig-worker platform, and technology capabilities to leverage the government-backed Open Network for Digital Commerce (ONDC).
“Ola recently moved founder Bhavish Aggarwal’s brother Ankush Aggarwal back to Ola Cabs as part of the senior leadership or CXO team,” said a person familiar with Ola’s strategy. “Ankush Aggarwal is expected to run the financial services business.”
An email query sent to the company remained unanswered till press time.
Senior-level exits
The restructuring is part of a broader push towards profitability as Ola Cabs prepares for an initial public offering (IPO). Ola Cabs is planning an IPO to raise $500 million, valuing the company at approximately $5 billion. The company plans to file the necessary paperwork with the Securities and Exchange Board of India within the next three months, according to sources.
The company is also witnessing senior-level exits. Kartik Gupta, the chief financial officer (CFO) of ANI Technologies, has stepped down, according to sources. Gupta’s resignation came two weeks after Ola Cabs’ chief executive officer Hemant Bakshi quit. The departure of Gupta, a former Procter & Gamble executive, and Bakshi, a former senior Unilever executive, is part of the restructuring exercise at the company that will impact at least 10 per cent of the 1,800-strong workforce, sources said. They said these changes will result in certain roles within the company becoming redundant. According to people in the know, there was a misalignment in terms of hiring the talent to run such businesses, as the founder Bhavish Aggarwal is looking for a leadership team that has a startup and founder-led mindset and understands technology.
Earlier this year, Ola announced that its India mobility business turned Ebitda (earnings before interest, taxes, depreciation, and amortisation) positive in the financial year 2023, making it one of the few Indian internet companies to achieve this feat.
This restructuring is aimed at productivity enhancement. Ola recently said that the restructuring will allow Ola to strengthen cost structures, focus on growth, and increase its bottom line. “In the financial year 2023, Ola generated revenue of Rs 1,987 crore. During the same period, Ola reported a positive Ebitda of Rs 250 crore and achieved profitability – a profit before tax of Rs 171 crore,” said the company recently.
First Published: May 20 2024 | 7:47 PM IST