Ola's move to invest in Vogo is in line with the ride-hailing platform's move to evolve into a mobility provider rather than just a cab company, reports Alnoor Peermohamed.
Softbank-backed Ola has said it will invest $100 million in the scooter sharing start-up, Vogo, as part of a deal to allow the latter's customers access two-wheeler rentals from its app.
The investment, made in tranches, will help Vogo add 100,000 scooters to its fleet as part of the strategic partnership between the two firms.
The first installment was received by Vogo as part of its Series A funding in August.
Vogo had raised around $7 million in its first round of institutional funding. It was led by Ola and also saw the participation of Matrix Partners, Stellaris Venture Partners and Hero MotoCorp chairman Pawan Munjal's family office.
"Our investment in Vogo will help build a smart multi-modal network for first-to-last-mile connectivity in the country. Vogo's automated scooter-sharing platform, backed by Ola's expertise in the space, can help transform our cities," said Bhavish Aggarwal, co-founder and CEO of Ola.
Ola's move to invest in Vogo is in line with the ride-hailing platform's move to evolve into a mobility provider rather than just a cab company.
It also signals the company's move to tap the scooter rental space, which has been growing rapidly in the past one-two years in major metro cities.
The company did not outline or divulge details about the period over which the investment of $100 million would be made in Vogo, but a source close to the deal said it would depend on the scooter rental start-up's appetite to absorb the vehicles.
He said while Munjal's investment in the company could be to align Vogo's vehicle purchasing to benefit Hero MotoCorp, no such exclusive deal had been signed.
The Hero MotoCorp chairman's investment in Vogo is similar to Ratan Tata's investment in Ola, done in his personal capacity.
"Vogo has seen a surge in the past five months, growing over 10x in scale. We are thrilled to have Ola join us on this journey and help turbocharge our growth by providing us access to strategic and capital-efficient supply, as well as to millions of customers on its platform in time to come," said Anand Ayyadurai, founder and CEO of Vogo.
Ola's investment in Vogo will give its users access to scooter rentals, cabs and autos on its platform in Bengaluru and Hyderabad, and other cities as the start-up plans to scale up across India.
Vogo, on the other hand, will get access to the 150 million plus customer base that Ola claims it has.
As it looks to fend off rival Uber, Ola is actively looking at diversifying its business to attract funding from both new and existing investors.
For this, the company acquired Ridlr, a provider of information and ticketing on public transport, apart from its acquisition of online food ordering app Foodpanda.
It also experimented with bicycle sharing at select college campuses last year and is building an electric rickshaw for use as first and last-mile connectivity in cities.