Tata Opportunities Fund picks up stake in Uber, makes first investment outside India

BENGALURU: San Francisco headquartered taxi hailing app Uber Technologies has raised an undisclosed amount of funding from private equity firm Tata Opportunities Fund, marking the fund's first investment outside India.

The funding will be used by Uber to globally invest across all markets and to experiment with new innovations. TOF will not be taking a board seat in Uber Technologies.

"Uber is a global innovator and with the strong use of technology, it is creating the taxi aggregation market globally," said Padmanabh Sinha, Managing Partner of TOF's advisory team in India, explaining his thesis behind the investment.

Amit Jain, Head of Uber India said that, "Tata is a strategic partner for us and we will be leveraging Tata's businesses to grow faster." Uber and Tata see a lot of synergies, in terms of vehicle financing programmes as well as networking within India to get past regulatory hurdles in a seamless manner, according to experts.

"Right now, we're particularly focused on building a great service for hundreds of millions of Indians--and Tata's leadership and experience will be crucial in helping us meet this important goal," said Travis Kalanick, CEO of Uber Technologies in an emailed statement.

Last month, Uber announced that it is going to invest $1 billion in the Indian market in the next nine months. This investment is separate from that committed amount, Uber clarified.

In India, Uber competes with Softbank and Dst Global backed Ola, which has raised around $700 million and is in late stage talks to raise close to $500 million. Ola is valued at close to $4.5 billion.

In its latest round, Uber also raised about $1 billion from Microsoft and private investment arm of the Bennett, Coleman and Company Limited (BCCL), which publishes this newspaper. The company is now valued at about $51 billion and has raised close to $5 billion till date. Besides, China's largest search engine company Baidu has also made an undisclosed investment in the company.

"As an investor, we are not typical venture investor so we look at cash flows and do believe there is a path to profitability for Uber in the near future," Sinha added.

Earlier this year, Uber appointed former online real estate portal's president--Amit Jain-- as India head. Over the last three months, Uber has rapidly adapted itself to the Indian market, partnering with autos in Delhi and rolling out cash payment options for its users in six cities including Pune, Ahmedabad, Chandigarh, Jaipur, Kochi and Hyderabad. This makes India the only country other than Kenya where Uber has not solely run on card-based payments, helping it expand its reach to users not well versed with loading digital cash or adding a credit card on a mobile application.

Interestingly, both Uber and its local archrival Ola have taken a different approach to expansion. While Ola focusses on increasing presence in smaller towns and cities - now numbering well over 100 - Uber looks at going deeper into the existing markets.