Microsoft Corp. could invest $50-100 million (Rs320-640 crore) for a small stake in ANI Technologies Pvt. Ltd, which runs Ola, in a deal that could see the ride-hailing service switch to Microsoft’s Azure cloud platform from Amazon Web Services (AWS), two people familiar with the matter said.
Microsoft chief executive Satya Nadella has been pushing Azure in India to grab market share from AWS and others.
In February, Microsoft announced a long-term cloud services deal with Flipkart Ltd; Microsoft later invested about $200 million of the $1.4 billion round raised by the online retailer.
“The talks with Ola are in very early stages. More than the money, it is more about Nadella’s vision of partnering with more and more large technology companies in India and establish Azure as service of preference. Microsoft is likely to invest in Ola but a term sheet is yet to be issued,” one of the two persons cited above said on condition of anonymity.
Ola needs massive amounts of capital as it is locked in a bruising battle with the local unit of Uber Technologies Inc., the world’s most valuable and deep-pocketed start-up. After it sold its Chinese business to Didi Chuxing in August, succeeding in India became one of the top priorities for Uber.
Ola and Uber differ over who controls how much of the market. Uber claims it is bigger than Ola but executives and investors at Ola claim that Uber is less than half of Ola’s size. There is no conclusive way of checking either claim.
Uber India president Amit Jain said in an interview in September 2016 that Uber’s completed trips had risen from 1.6 million in January 2016 to 5.5 million at the end of August 2016.
Ola reported a seven-fold jump in revenue to Rs758.23 crore in the year ended 31 March 2016, but losses nearly tripled to Rs2,313.7 crore because of heavy discounts to customers and spending on incentives to its drivers.
This month, the cab-hailing business was jolted by the kidnapping of an Ola rider by one of the drivers on its platform. A 29-year-old doctor in Delhi was kidnapped by an Ola driver and his accomplices on 6 July and held captive for nearly 14 days before the police found the victim, who was unhurt, in Uttar Pradesh and arrested four of the kidnappers.
The crime is seen as the biggest threat to the expansion of cab-hailing services in India since the rape of a woman Uber rider in December 2014 forced the company and Ola to be stricter about their driver verification processes, add an SOS button on their apps and generally pay more attention to passenger safety. The two companies will now have to implement more stringent processes while signing up new drivers, a move that is likely to hit sales growth.
Source: Mint