The online taxi rental market is heating up with Mumbai-based Olacabs now in the process of finalising a second round of funding that could be as much as $20 million, according to people with direct knowledge of the matter.
The domestic radio taxi sector, in which companies don’t always own the vehicles but rather lend their brand to drivers and cab operators in exchange for a fee, has recently seen the entry of international players such as Google-backed Uber and the scaling up of domestic competitors such as TaxiForSure.
Olacabs’ new round of funding is from existing investor Tiger Global and also from Matrix Partners. It will be primarily used to expand into newer markets and scale up their technology infrastructure. It had picked up its first round of funding of nearly $3 million from Tiger Global last year. In some ways, the entry of Uber to India has legitimised the market, according to industry insiders. For instance, the last few months have seen TaxiForSure and ZoomCar pick up funding also.
Olacabs, which began operations in 2011 , has over 6000 cabs presently. When contacted, a company spokesperson confirmed the development but declined to comment on the exact amount of funding raised.