Electric vehicle (EV) maker Ola Electric has reportedly signed an agreement to raise $140 in a funding round led by Singapore’s sovereign wealth fund Temasek with participation from other existing investors.
Sources told Livemint that the agreement was inked on Monday (September 4) and the amount would be credited into the EV major’s account within four to five days. As per the report, Temasek will invest $90 Mn while the remaining $50 Mn will be pumped by remaining investors, primarily comprising family offices.
The round reportedly pegs Ola Electric at a valuation of $5.4 to $5.5 Bn. This is higher than the company’s last funding round in January 2022 when the EV maker raised around $200 Mn from a clutch of investors at a valuation of $5Bn.
A person familiar with the development told the publication that the capital will give the company more runway and ‘an additional buffer’ as it prepares for its much-touted public listing.
A source reportedly also said that the EV maker will likely raise another round before the public markets debut. This comes days after reports surfaced that Ola Electric was looking to raise $350 Mn ahead of its initial public offering (IPO) in a round led by Temasek.
The fresh capital will give the company more heft as it lines up more investors for its potential listing early next year. The capital could also be deployed to scale up the production of its recently announced long line-up of electric scooters, bikes and a potential electric car.
The announcement comes at a time when the EV original equipment manufacturer (OEM) has been grappling with losses. The company saw its net loss surge almost 4X to INR 784.1 Cr in the financial year 2021-22 (FY22) compared to INR 199.2 Cr in FY21. The numbers are not comparable as the company only began delivering its EV scooters in December 2021.
The company is yet to disclose its financial numbers for FY23, but, if reports are to be believed, it raked up a loss of INR 1,116 Cr ($136 Mn) against revenue of INR 2,750 Cr ($335 Mn), missing its targets for the fiscal year.
As Ola Electric lines up investment banks for its purported 2024 IPO, the company has been mired in multiple issues, with losses being the least of its problems. The EV maker’s escooters have been involved in fires while top-level executives have been leaving in droves amid a leadership reshuffle.
Alongside, expenses continue to pile up as Ola Electric continues to scale up its ambitious plans of setting up factories even as sales numbers dwindle in the aftermath of the FAME-II crisis. On top of that, the company has also fired many employees in the past one year as part of a cost-cutting exercise at the parent company.
However, Ola Electric seems to be well-placed to capture the growth momentum of the Indian EV space, which has grown steadily lately on the back of higher adoption among the masses and government incentives.
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