Co-founder and chief executive officer Bhavish Aggarwal told the audience at an event in Bengaluru last week that seven-year-old Ola is poised to become a cash flow positive business — having recently hit operational profitability — and that’s a key driver towards a listing. That’s despite intense rumors of a tie-up with Uber following a spree of global exits from the U.S. firm, most recently in Southeast Asia where it struck a deal with local player Grab.
“The ambition for both me and [fellow co-founder] Ankiti [Bhati] has always been to build a sustainable, long-term independent institution,” Aggarwal said. “In that direction, we are definitely going to IPO. Our goal is to aim for an IPO in about three to four years. We are on that path, our focus on building a sustainable business model [and] a profitable business builds into that ambition.”
Notably, he didn’t specify where a listing might take place for Ola, which was most recently valued at $7 billion following an investment last year.
Doubling down on his belief in building a sustainable and independent business, Aggarwal made a sly dig at Uber in suggesting that the U.S. company is preoccupied with short-term strategies in India.
“The Indian market, which I believe many internet companies don’t fully appreciate, especially the ones who are not Indian, if you give consumers a lot of free things they’ll take it. But the focus has to be to build a long-term sustainable business model… consumers are not price-conscience in India, consumers are value-conscious,” he said.
Despite that, he did acknowledge the role of a strong rival in building Ola’s business over the years. There’s no clear metric to judge which company is ahead, but with its coverage of more than 100 cities and towns in India, Ola’s numbers are higher than Uber, which has stuck to tier-one and -two locations. Although, anecdotally, the gap is slim in urban areas of the country.
“Competition makes you stronger, we don’t fear competition,” Aggarwal claimed. “We have a much stronger business, strong market position and we’re getting to a place where we can list the company.”
A deal with Uber has been consistently mooted as part of Uber’s global exits that seemed aimed at cleaning up its balance sheet in preparation for a public listing of its own, which CEO Dara Khosrowshahi said is likely in 2019. Then, of course, there’s the SoftBank factor. The Japanese firm is a shareholder in both companies, as was the case with Grab, where it is believed to have pushed for a deal with Uber.
While there have been talks, sources on both sides have confirmed to TechCrunch, Aggarwal said, somewhat tongue-in-cheek, that “so far nobody’s made an [acquisition] offer I can’t refuse.”
Uber, on its side, has said it has no interest in more minority deals — which see it leave a market in exchange for equity in the local rival — but that could be gamesmanship or a hint that, in the event of a deal in India, Uber intends to make Ola the minority partner.
Is Ola genuinely aiming for an IPO in three to four years, or are these tactics aimed at dissuading Uber, SoftBank and others from forcing a union with its big rival? That’s unclear. Aggarwal reiterated that Softbank is merely an investor, one of many Ola investors, but the questions are sure to continue either way. We’re all just going to have to get used to the speculation.