Ola Electric is in advanced talks to raise between $250 million to $500 million in a new financing round as the Indian firm looks to scale its electric vehicle manufacturing business in the South Asian market, according to two sources familiar with the matter.
Falcon Edge Capital is in advanced talks to lead the round, which values Ola Electric between $2.75 billion to $3.5 billion (up from $1 billion in its previous fundraise in 2019), sources told TechCrunch, requesting anonymity as the matter is private. Singapore's Temasek is also holding conversations, the people said.
The talks come at a time when ride-hailing giant Ola, the initial parent firm of Ola Electric, is looking to file for an initial public offering. The firm, which recently raised $500 million, has signed up a few bankers and is looking to file for the IPO later this year, according to a third person familiar with the matter.
Terms of the deal are not final yet so they may change, sources cautioned.
The firm is looking to raise as much as $1 billion, the person said, cautioning that the matter is not final. Indian media first wrote about the IPO talks.
Earlier this month, Ola Electric launched its first electric scooter, called Ola S1, that is priced at 99,999 Indian rupees, or $1,350. The electric scooter offers a range of 121 kilometers (75 miles) on a complete charge.
"Ola is the best product in the market currently with features significantly better than peers. Incumbents, despite all their resources have launched products which appear as another variant of an ICE product and lack the punch. We have in general been specifically disappointed with both Bajaj and TVS on this front," analysts at Bernstein wrote to clients in a report earlier this month.
"While startups such as Ather have made significant efforts on the product, the steep pricing, significantly slow pace of manufacturing scale up, restricted launch in only a few cities earlier were the key drivers for weak sales. The crucial differentiators for Ola are the software based features, range, peak speeds, and acceleration (fastest EV scooter now), boot space, and colour options."
The story was updated with additional details.