Tata Opportunities Fund (TOF), a private equity fund advised by Tata Capital, on Wednesday said it will make a “significant” investment in US-based taxi hailing app Uber.
The companies, however, declined to comment on the amount being invested and the percentage of stake being picked up.
TOF is the second Indian entity to invest in Uber after The Times of India group’s Times Internet bought a small stake for about Rs. 150 crore in the US-based company in March.
“This is TOF’s first investment in a company based outside India. We are delighted to support Uber’s growth and continued success around the globe, more recently in China and India. Uber’s technology continues to transform the way millions of people commute while creating economic opportunities for hundreds of thousands of first time entrepreneurs (drivers and owners), who value the flexibility it offers,” TOF Managing Partner Advisory Team India Padmanabh Sinha told PTI.
Interestingly, Tata group Chairman Emeritus Ratan Tata is an investor in Uber’s rival Ola, in his personal capacity.
“Tata is synonymous with entrepreneurialism in India and we are incredibly excited to have TOF on board as a partner. Right now, we are focusing on offering a great service, backed by security and easy payment and hassle-free payment options,” Uber India Head Amit Jain said.
Uber, which launched its services in India less than two years ago, operates its services in 18 Indian cities and has a current base of over 1,50,000 driver partners. It is registering 40 per cent month-on-month growth (in terms of trips taken by customers) and claims to have a market share of over 35 per cent in India.
Last month, the company had announced an additional investment of USD 1 billion in India as it targets one million rides a day in 6-9 months.
Uber said, the investment will be used to expand and improve operations, foray into newer cities, develop new products as well as payment solutions and improve support network.
Besides this investment, TOF has till date committed about USD 400 million across companies like Ginger Hotels, Tata Sky, Varroc Engineering, Shriram Properties, Tata Projects and TVS Logistics.
Though Mr. Sinha declined to comment on the investment details, he said TOF has invested between USD 50-100 million in these companies.
TOF had completed the final closure of its fund in early 2013 with commitments of about USD 600 million from marquee global investors. Uber had earlier said it would invest USD 50 million in Hyderabad over the next five years to establish a facility that would be its biggest international office.
Uber is piloting cash payments in Hyderabad, a first in its global operations and has also added auto rickshaws to its platform as part of its efforts to expand services in India.
However, it has not been a smooth sailing for the US-based firm in the country. It has been embroiled in repeated controversies over alleged misconduct by its drivers with women passengers. Last December, it faced a temporary ban in the wake of a woman passenger alleging rape by one of its driver.
It is also witnessing strong competition from local players like Ola in India, which is now Uber’s largest market geographically outside the US.