Ola incurred Ra 2,311cr losses in 2015-16
The ad war with Uber is proving too costly for homegrown Ola. Locked in an intense battle with deep-pocketed, Uber for leadership for internet-based cab-hailing space, Ola has posted a consolidated loss of over Rs 2,311 crore for 2015-16 or Rs 6 crore a day.
ANI Technologies that runs Ola brand cabs in a filing with the ministry of corporate affairs said its losses widened from Rs 796.11 crore in 2014-15 to 2,311 in 2015-16.
The losses widened due to higher ad spend and employee cost. While advertising and promotional expenditure rose to over Rs 437.89 crore in 2015-16 from Rs 99.84 crore in the previous year, employee-related expenses increased five-fold to Rs 461.60 crore from Rs 85.16 crore in 2014-15. Revenues grew multifold to Rs 758.23 crore during 2015-16 from Rs 103.77 crore.
Ola did not respond to queries emailed by FC.
ANI Technologies had raised over $1.5 billion from investors, including Japan’s SoftBank Group, Tiger Global, Matrix Partners, Steadview Capital, Sequoia India, Accel Partners US and Falcon Edge. In last November, Ola had raised about $250 million from SoftBank, Its board of directors has recently approved a proposal to raise another $100 million from investors, which it had said would be “primarily to fund its expansion plans”.
Ola has a presence in 110 Indian cities compared to Uber's operations in 29 cities, has been aggressively expanding its portfolio of services. Both Ola and Uber have loosened their purse strings to bring in more riders and driver partners on board, offering discounted rides and incentives to capture market share.