Ola’s investors want out. Bhavish Aggarwal won’t let go

**Snigdha Sharma** (0:02)
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For months now, a quiet conversation has been circulating among Ola's investors. And no, it's not about profits or expansion plans or even the electric dreams of its founder, Bhavish Aggarwal. The question is far simpler and far more serious. What is going to happen to Ola's core ride-hailing business now? Not long ago, Ola defined urban mobility in India. It was not just an app. It was a symbol of a country that was learning to move faster, digitally and literally. But that story has now lost momentum. In 2018, Ola's market share stood around 45%. Today, it is closer to 25%. Its valuation has collapsed by four-fifths, and the investors who helped build its rise are now exploring how to get out, or at least how to limit their losses. Some even approached rival Rapido last year to discuss a potential merger. The talks, as far as we know, went nowhere. Not because the idea did not make sense, but because the founder did not want it to. You see, Bhavish Aggarwal's focus has shifted elsewhere. To Ola Electric, the electric vehicle arm that now consumes most of his attention, money and energy. Meanwhile, Ola's ride-hailing arm, once its flagship, is shrinking, leaderless and dependent on heavy discounts just to hold on to users. So today, we are going to look at how a company that once redefined mobility is now struggling to find its own direction. And more importantly, whether Ola's investors can find the exit door before the founder does. Welcome to Daybreak, a business podcast from The Ken. I'm your host, Snigdha Sharma, and I don't chase the news cycle. Instead, every day of the week, my colleague Rachel Varghese and I will come to you with one business story that is worth understanding and worth your time. Today is Tuesday, the 28th of October.
Let's start with the investors. Back in 2020, Bhavish Aggarwal offered exits, partial or full, to some of Ola's earliest backers. Tiger Global, Z47, and a dozen Angel Investors were among them. But not everybody took the deal, and now many of them are stuck. And that is because shareholder agreements in startups come with strict clauses. Lead investors are usually promised exits within five to seven years, either through an IPO, a buyback or a secondary sale. If that doesn't happen, they can push a forced exit, often through what is called drag-along rights. Aggarwal did execute a buyback during a secondary sale in 2021 But many early investors like Steadview Capital, DST Global and Vanguard have been waiting since 2015 for their return. And with every passing year, the conditions for a good exit have only gotten worse. When Ola was preparing for its IPO in 2021, Aggarwal pitched it as a super app. Rides, payments to Ola money, food delivery via Ola Foods, loans and even its own maps. To put it simply, it was looking at a total addressable market of $250 billion. And of course, that pitch worked. Warburg Pincus, Temasek and Novama came in, expecting a listing in six to eight months. At the time, Ola Cabs was the third most downloaded ride hailing app globally with operations in the UK, Australia and New Zealand. But that IPO never arrived. And by 2023, the company's valuation had cratered. Revenues fell from over 2800 crore rupees in the financial year 2020 to 2200 in financial year 2024 And despite a small positive beta in 23 and 24, analysts are expecting losses again this year. Meanwhile, S&P Global has already flagged its concerns. Ola's cash reserves could quickly erode if the company keeps using discounts to hold market share. So, investors, frustrated, began looking for options. Last October, some even floated the idea of a merger with Rapido. But according to insiders, who spoke to my colleague Suprata Anupam, Aggarwal refused. He wanted to stabilize Ola Electric first, the EV arm that has seen billions of dollars in investment from Future Factory to the Ola Cell Gigafactory. It is where his real ambitions lie, and arguably his real equity lies. In contrast, insiders say that he has neither the bandwidth nor the money to take the ride hailing company public right now. The plan, they say, is to maintain the status quo. But as S&P Global put it, maintaining the status quo could burn through cash first. So for a company that was once valued in the billions, simply staying afloat has become the new goal. But survival was never supposed to be the benchmark. More on this in the next segment.