By Shivam Saklani
A big day indeed, for Bhavish
Aggarwal, but even a bigger conundrum, when he was offered $1 billion for his
ride hailing company, OLA, by Japan’s Soft bank. This offer was made by Softbank,
at the time when it was mired in a fierce battle for supremacy with world’s
most valuable startup, Uber.
The offer, although lucrative,
was still not accepted in its original form by Aggarwal, the reason being, that
down round, however painful, is still acceptable, but not the tacit loss of
control. Finally, OLA accepted $250
million from Softbank and chose to seek out newer investors.
Seasoned Entrepreneurs
appreciated the move; they asserted that, every startup should have at least 2
strategic investors, where each one has the potential to balance the influence
of the other on the firm. For OLA, Aggarwal’s decision,
proved to be prescient, as slowly, the investment trickled in, as the company
won more market share by launching premium subscription service like ‘Select’
and entertainment offerings like ‘OLA Play’ besides localizing more, by adding
autos to their network too!!
According to Masayoshi Son, CEO
of Softbank, It is now very easy for Indian startups to attract investment, as
the markets of most other countries are saturating, and more and more companies
want to start business, in some form or the other in India. In this scenario,
the local player has the advantage of knowing local culture and adapting to it. Global players, on the other
hand, cannot change their technology platform or their supply chain according
to each market, their benefit of economies of scale itself becomes their
weakness. Still most investors and founders
view strategic capital as a double edged sword, thus the speculation regarding
the investing and accepting arises.
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