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Ola Electric Aims for $300 Million Funding, Narayana Murthy's Catamaran May Come on Board

Major Investors Propel Ola Electric's Valuation to $5 Billion in Funding Round

8 June 2023


Kunal Tyagi

India produced 3X more unicorns than China in 2022.png
  • Ola Electric is in talks to raise $300 million in funding, with Catamaran and Temasek among the potential investors.

  • Catamaran, the investment vehicle of Infosys co-founder NR Narayana Murthy, may invest $100 million to $150 million in Ola Electric, aligning with its focus on manufacturing.

  • The funding round aims to provide an exit opportunity for early investors before Ola Electric's planned IPO in 2024.

Ola Electric, the prominent manufacturer of electric scooters, is reportedly engaged in discussions to secure a substantial amount of funding for its upcoming funding round. The company's objective is to raise $300 million, and one of the potential investors in this endeavor is Catamaran, the investment vehicle associated with NR Narayana Murthy, the co-founder of Infosys. Singapore's Temasek, an existing investor, is also expected to contribute around $100 million to the funding round. These recent developments highlight Ola Electric's concerted efforts to fortify its financial position and expand its operations within the rapidly growing electric vehicle market.

Sources indicate that Catamaran is positioned to invest between $100 million and $150 million in Ola Electric. This potential collaboration holds significant promise for Ola Electric, as the chairman of Catamaran, MD Ranganath, has recently expressed a keen focus on the manufacturing sector, which is pivotal for India's overall growth. Ola Electric's plans to venture into battery cell production align perfectly with Catamaran's investment strategy, which aims to double its investments to $2 billion over the next five years, with a particular emphasis on renewables, precision engineering, and deep tech.

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Back in January 2022, Ola Electric successfully raised $200 million from various investors. However, the current pre-IPO round seems to primarily serve the purpose of providing early investors with an opportunity to exit. An anonymous investor has highlighted the challenges posed by the current market environment, expressing concerns about potential IPO difficulties in the future, given the recent setbacks experienced by companies such as Paytm and Nykaa. This strategic move allows investors to potentially realize their investments before Ola Electric's planned IPO in 2024.

To facilitate its IPO, Ola Electric has engaged the services of renowned financial institutions such as Goldman Sachs, Kotak, Citi, and Axis as book runners. This choice of partners indicates the company's intention to raise approximately $1 billion at a valuation of $10 billion. While the specific valuation for the funding round is yet to be determined, sources estimate it to fall between $5 billion and $6 billion. Notably, Softbank, Ola Electric's largest investor holding a 22% stake, is unlikely to participate in this new funding round.

Although there were initial speculations about the involvement of various global private equity investors and funds from the Middle East, sources suggest that their participation is now less likely. Nonetheless, the interest shown by Temasek and the potential partnership with Catamaran underscores the industry's recognition of Ola Electric's remarkable growth potential and their confidence in the company's expansion plans.

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