Ola Financial gets Rs 205 crore from Falcon Edge, Matrix Partners | Economic Times

Bengaluru: Ola Financial Services has picked up about Rs 205 crore from investment fund Falcon Edge and venture firm Matrix Partners as part of its first institutional financing round, regulatory filings show.Apoletto Managers, the and Arun Sarin's family office also participated in the round. This deal closed at a valuation of $250 million, according to two people directly aware of the matter.The fundraising comes after the company separately raised $20 million in working capital debt, people in the know of the matter said, as the Bengaluru-based firm looks to bet on financial services in an attempt to diversify beyond its core ride-hailing business.“The financial services space in India and in our global markets is significantly underserved due to weak distribution, low trust and complicated products,” Bhavish Aggarwal, cofounder and CEO of Ola told employees in an email on Tuesday. “We have a once in a lifetime opportunity to change this with the reach and capabilities of our core ride-sharing platform,” he said. ET has seen Aggarwal’s email.The crisis wrought by the Covid-19 pandemic has meant there was a need for product innovation in the financial services space that were consumer and digital-first, Aggarwal added.Short-term credit, mobile wallet, insurance, and utility bill payments are some of the existing services housed under Ola Money.In November, ET reported that Ola had moved its financial services business out of parent ANI Technologies to raise capital separately for the independent entity.As part of the potential funding, Vikram Vaidyanathan, MD at Matrix Partners has joined the board of Ola Financial Services.Ola’s ride-hailing business revenue dipped 95% over the past two months amid a nationwide lockdown to prevent the spread of the Covid-19 virus. At a time when the market is expected to recover only gradually, Ola is sharpening its financial services offerings. Ola will fight incumbents like Paytm, PhonePe, AmazonPay and Google Pay and the yet to be launched WhatsApp Pay as it aims to build a full-fledged financial services offerings.Ola Money CEO Nitin Gupta quitsIn a separate development, Nitin Gupta, CEO of Ola Financial Services, has resigned after more than two years at the company. “Nitin has decided to move on from his active role at Ola… he is a solid entrepreneur and in his two year-plus years with us, has built a great foundation for our OFS business,” Aggarwal wrote in the email.Prior to joining Ola, Gupta was the co-founder and CEO of PayU India.Harish Abhichandani, Group CFO at Ola, will take over from Gupta as interim CEO, according to the email.Over the last two years, Ola has been ramping up its financial services and has seen its post-paid business hit positive contribution margin numbers at scale. “Ola is now the fifth largest issuer (of credit) in the country and spends on the post-paid platform continue to grow,” said a person aware of the plans.In January, the company applied for a non-banking finance company (NBFC) licence. It has struck partnerships with Religare for health insurance, Zipcash for the wallet business, and with SBI to launch credit cards.Ola Financial Services’ board of directors includes Hemant Kaul, a financial services veteran, as well as Vodafone’s former CEO Arun Sarin.Note: The story has been updated with information from Ola's regulatory filings.