The quick update on Ola Cabs & Ola Group
- Ola Cabs (the domestic cab rental company) is owned by ANI Technologies Pvt Ltd
- Bhavish Aggarwal serves as the CEO of Ola Cabs & ANI Technologies
- The current structure has Ola Cabs, Foodpanda and other ANI-owned businesses (like electric cabs, overseas operations, logistics, etc) running as independent entities
- Bhavish wants to switch to a group holding model, similar to the one that Sachin Bansal and others had adopted at Flipkart before the famous acquisition
Livemint has reported that just four people within ANI know of this development. It is therefore largely a matter of intra-organizational speculation, as to how similar this new structure will be, when compared to the erstwhile Flipkart/Flipkart group structuring.
Bhavish Aggarwal is keen on developing a neat hierarchy within the org, because the cluster of companies under his control, already has several products and subsidiaries, each of whom needs its own set of skilled administrators and a focused management strategy. In order for these units to really scale up, they need to be handled with expert management, fine-tuned to understand and appreciate the needs of each business.
One ANI Technologies spokesperson remarked anonymously to Livemint, regarding this matter.
“It’s becoming difficult for Bhavish to devote attention to all the different businesses. The group structure is an efficient way to increase management bandwidth."
The sources also revealed, that after the recent departure of Ola’s chief operating officer Vishal Kaul, senior vice-presidents Saikiran Krishnamurthy and Pallav Singh are being prepped for bigger roles under the new hierarchy.
Recent organizational developments at Ola
In March, Ola recruited former BMW executive Anand Shah to head its electric vehicle business unit (Ola has revealed that it plans on adding 1 million electric vehicles to Indian roads via its fleet by 2021).
Ola acquired Foodpanda in December 2017 in an all-stock deal,and Pranay Jivrajka as the CEO. Ola is likely to invest to the tune of $200 million into this business later this year, and raise further funds for the food-delivery platform.
Ola Cabs also made an official entry to the Australian market in March. Introductory rates were pegged at 7.5%, to ensure that the competition with Uber continued to work in Ola's favor.
Effects of corporate restructuring on Ola's valuation
The new group holding strategy will most likely boost the cab-hailing company’s current valuation. It is also expected, that businesses functions will operate much more smoothly.
Today, SoftBank is a major investor in both Ola and Uber. Masayoshi Son (Head, Softbank) is known to take massive chances on his Indian bets, to generate maxmimum returns.
One may want to look at the Ola restructuring as a possible move towards Ola-Uber consolodation, similar to the Walmart-Flipkar exit. However, with a clear national lead (in Indian ride-hailing numbers, against its rival Uber), international expansion and electric vehicles as playing cards, Bhavish Aggarwal is likely to have the upper hand if or when this happens.