Tata Opportunities Fund Invests $100m in Uber
Asian Investors a Big Money Source for Taxi App
The private equity division of Tata Group known by the name of Tata Opportunities Fund has begun its new financial investment innings by reportedly investing a sum of $80-100 million in Uber, a mobile-based application providing point to point travel solution to its users by working as a medium of contact (through its app) between the customer and the local cab drivers/providers.
Tata Opportunities Fund, one of the leading third-party private equity funds of India decided to invest in the San Francisco-based company after taking into account the estimated market value of the latter which is slightly over $50 billion. The decision of investment from the arm of Tata Group is one of its kind as this is the first instance where the company decided to invest in a company that has its headquarters outside the political boundaries of India.
The timing of the investment is also crucial from the point of view of Uber as it has come at a time when the company is facing tough competition from the local Asian competitors like Ola, DidiKuaidi from China, and GrabTaxi from Singapore.
Amit Jain, the head of Uber India, confirmed the investment made by TOF but without spilling the beans on the question of the numbers involved in the investment. Although Jain did mention that the nature of the deal was purely strategic and financial and the fact that is looking forward to positive outcomes resulting in the creation of more opportunities to work in collaboration with Tata Group, but again without elaborating on the possible future initiatives and plans.
Co-founder and also the CEO of Uber, Travis Kalanick did give a glimpse of future plans through his statement mentioning “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”.
As per the statement recorded from Padmanabh Sinha, who is part of the advisory team of TOF functioning as managing partner said “Uber has been transformational and is differentiated in many ways. We invest in companies which are in a high cash burn mode but then they have a clear path to profitability drawn up” and also backed up the decision taken by TOF to make its first investment in tech by stating that it was as per the policy and intention of the company to support companies across all segments.
Uber as a company has not yet announced this new financing round. According to the recent media reports the round witnessed a raise of $1 billion from Microsoft and from Bennett, Coleman & Co. (the sub-company which looks after the investment of Times of India). However, Uber has not revealed the names of other investors as of now.
In the recent past, Uber promised that it will be investing a sum of $1 billion in India. It has deployed the same amount in China as well as to corner market share from Ola. “The funding announcement made today is separate from the India investment allocation”, clarified Amit Jain. Out of this $1 billion amount which has been allocated to India a huge chunk will be used to carve out discounts and promotions by Uber. The company needs it as at present it is operational in 18 cities in India.
Uber is also involved in many such strategic partnerships which include that with Baidu in China, and America Movil in Latin America.