SoftBank And Ola Face Off

The Indian ride-hailing startup says thanks, but no thanks to Masayoshi Son

- Dimitra Kessenides

When startups raise venture money to build their businesses, they 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 just completed its Series J fundraising and is marching toward Series K, a letter almost unheard of by people who track such things.

What’s going on here involves more than money. Ola co-founder Bhavish Aggarwal is fighting to maintain his independence against SoftBank Group Corp. The Japanese conglomerate, led by Masayoshi Son, was an early backer of Ola. But Aggarwal has grown concerned about SoftBank’s influence after it took a stake in his archrival, Uber Technologies Inc., and then encouraged the two to merge.

With his $100 billion Vision Fund, focused on investments in fast-growing tech companies, Son has offered to put more money into Ola. But Aggarwal doesn’t want SoftBank to gain more sway. So instead of taking $1 billion or more from Son, he’s pieced together smaller slices of funding from unaligned backers. So far in 2019, he’s picked up $300 million from Hyundai Motor Co. and about $90 million from Sachin Bansal, co-founder of Flipkart Online Services Pvt. In January share allotments were also made to Steadview Capital and a few others.

“Bhavish is spurning SoftBank money as he doesn’t want to get diluted out of Ola,” says Mohandas Pai, venture capitalist and former chief financial officer of Infosys Ltd. “Founders become employees when someone sits on your board and tells you how to run the show.”