Companies Securing Investments to Tide Over Corona-led Recession

When demands for non-essential commodities have declined, businesses are searching for new ways for survival
  • BY Jaspreet Kaur

    Feature Writer, BusinessEx

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  • May 26,2020
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  • 14 Mins Read

When demands for non-essential commodities have declined, businesses are searching for new ways for survival. Securing investments for global investors, changing their product line and selling a part of the company's stake are a few options made by the companies. During the lockdown, many startups are also going for bridge financing rounds and borrowing money prior to their plans. 

In a similar vein, ride-hailing company, Ola is planning to diversify its offering and at the latest, its subsidiary, Ola Financial Services amassed INR 205 crore. The company has secured money from Falcon Edge and VC firm, Matrix Partners. It was the first institutional financing round of Ola Financial Services, The Economic Times reported citing the regulatory filings.

"Apoletto Managers, and Arun Sarin's family office also participated in the round. This deal closed at a valuation of $250 million," Two people, who are privy to the matter, told the cited media agency. 

The anonymous sources told the cited media agency that the fundraising happened when the company (Ola) separately raised $20 million in the form of working capital debt. It was also informed that the parent company plans to invest in financial services in a bid 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, as reported by the cited media agency. 

"We have a once in a lifetime opportunity to change this with the reach and capabilities of our core ride-sharing platform," Aggarwal informed. 

The cab aggregator's revenue has steeply declined by 95 per cent in the last two months due to the lockdown. At this time, when market turbulences are not expected to go away easily, the company is diverting its focus on financial services offerings. With this move, it is preparing to compete with other financial companies like Paytm, GooglePay and PhonePe in the market.

Other Deals in the Business Ecosystem 

While big companies like Ola and MakeMyTrip are shifting their focus on other beneficial services, others are raising funds to boost their business. 

Automotive technology startup, Euler Motors has lately secured INR 20 crore as part of its ongoing series A funding round. Venture Capital firm, Inventus Capital led the funding round of the startup, reported The Economic Times.  

The other investors that participated in the funding round include Blume Ventures, Jetty Ventures India Investments and Sujeet Kumar, Co-founder at Udaan.

"The series A funds will be primarily used for hiring talents, research and development (R&D), and launching our vehicles across the Indian key cities with a focus on localisation of the supply chain," Saurav Kumar, Founder and CEO at Euler Motors, said in an interview with the cited media agency. 

"Euler Motors is an early front-runner in the space and is well-positioned to build the EV ecosystem. Saurav and the team have built an impressive product with a unique approach to making it work at scale," Rutvik Doshi, MD at Inventus Capital India, told the cited media agency. 

The company claims to have established a nexus of over 100 charging infrastructure in Delhi-National Capital Region (NCR region) for charging more than 200 electric vehicles at any point.

Following a similar approach, a rural insurtech company, GramCover also secured investment.  

Of late, the startup amassed money in pre-Series A funding round from EMVC, Flourish, and Omidyar Network India. Existing investor Omnivore also participated in this round, reported the cited media agency. 

The Noida-based company was initiated by Jatin Singh. It focuses on elevating rural areas of the country by optimising technology and its point of sale (POS) network so that insurance can be accessed by all. 

"We are very excited to partner with fintech-focused VCs like EMVC, Flourish, and Omidyar Network India. India’s farmers and rural communities are massively under-insured, and GramCover is working every day to design and distribute innovative insurance products to meet their needs. Our vision is to cater to 5 million rural consumers in the next two years," Singh said the company’s official statement. 

The company is forming an ecosystem to offer insurance products like crop, life, livestock, health, motor, and asset insurance that cater to the needs of rural regions.

 

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