India’s Uber rival Ola is headed to Europe with ride-hailing launch in the UK

The UK is getting a new alternative to Uber after India-based ride-hailing company Ola announced plans to expand to the country, which will become its first market in Europe. Ola was founded in 2010 and it covers over 110 cities in India where it offers licensed taxis, private hire cars and rickshaws through a network […]

The UK is getting a new alternative to Uber after India-based ride-hailing company Ola announced plans to expand to the country, which will become its first market in Europe.

Ola was founded in 2010 and it covers over 110 cities in India where it offers licensed taxis, private hire cars and rickshaws through a network of over one million drivers. The company has raised around $3 billion from investors that include SoftBank, Chinese duo Tencent and Didi Chuxing and DST Global . It was last valued at $7 billion. Ola ventured overseas for the first time when it launched in Australia earlier this year — it is now in seven cities there — and its move into the UK signals a further expansion into Europe.

Ola’s UK service isn’t live right now, but the company said it will begin offering licensed taxi and private hire bookings initially in South Wales and Greater Manchester “soon.” Ola plans to expand that coverage nationwide before the end of this year. That will eventually mean taking on Uber and potentially Taxify another unicorn startup backed by Didi which is looking to relaunch in the UK — in London and other major cities.

So, why the UK?

Ola CEO and co-founder Bhavish Aggarwal called the country “a fantastic place to do business” and added that he “look[s] forward to providing a responsible, compelling, new service that can help the country meet its ever demanding mobility needs.”

It’s no secret that Uber has struggled in London, where its gung-ho attitude to business — ‘launch first, apologize later’ — has seen it run into issues with regulators. Uber (just about) won a provisional 15-month transport license earlier this year following an appeal against the city’s transportation regulator, Transport for London (TfL) earlier rejected its application.

The’ New Uber’ — under CEO Dara Khosrowshahi — is trying to right the wrongs of the past, but compliance with regulators takes time and requires wholesale changes to business, operations and company culture.

Ola isn’t commenting directly on its rivalry with Uber — we did ask, but got a predictable “no comment” — but the tone of its announcement today shows it is focused on being a more collaborative player than Uber.

Indeed, there’s been much groundwork. Aggarwal met with regulators in London last year and he said in a statement released today that he plans “continued engagement with policymakers and regulators” as the Ola service expands across the UK.

International expansion is very much part of Ola’s ambition to go public, which Aggarwal recently said could happen in the next three to four years. But Ola isn’t alone in looking overseas. Didi, the firm that defeated Uber in China and has backed Ola, Taxify and many others, has also been busy moving into new markets.

Last year, the firm raised $4 billion to double down on technology, AI and go overseas and it has come good on that promise by entering MexicoAustralia and Taiwan. It also landed Brazil through the acquisition of local player and Uber rival 99 and it is preparing to go live in Japan, where it will operate a taxi-booking service through a joint venture with SoftBank.

China’s Didi pumps $1B into its rebranded driver services business

Didi Chuxing is going pedal to the metal for its automobile services business after it announced it will invest $1 billion into the division, which is also getting a rebrand. The Chinese ride-hailing firm had been tipped to spin out the business and raise $1.5 billion from investors ahead of an IPO, according to a recent Reuters […]

Didi Chuxing is going pedal to the metal for its automobile services business after it announced it will invest $1 billion into the division, which is also getting a rebrand.

The Chinese ride-hailing firm had been tipped to spin out the business and raise $1.5 billion from investors ahead of an IPO, according to a recent Reuters report. The business itself hasn’t spun out, however, but it has been renamed to Xiaoju Automobile Solutions and given more autonomy with the introduction of its own general manager.

The division handles services for registered Didi drivers, such as leasing and purchase financing, insurance, repairs, refueling, car-sharing and more. Essentially, with its huge army of drivers, Didi can get preferential rates from service providers, which means better deals for its drivers. That, in turn, is helpful for recruiting new drivers and growing the business. (Didi claims to support 30 million drivers, but that covers food delivery as well as more basic point-to-point transportation.)

Rather than outsiders — SoftBank had been linked with an investment at a valuation of up to $3 billion — Xiaoju is getting its capital boost direct from Didi. The company said it injected $1 billion to “support its business in providing Didi drivers and the broader car-owner community with convenient, flexible, economical, and reliable one-stop auto services.”

Of course, these factors don’t preclude Didi from spinning the business out in the future and listing it separately to the parent Didi firm. That’s the reasoning Reuters made in its previous story, and it still stands to reason that if Didi is (as widely expected) planning a public listing of its own then it might be keen to break out this asset-heavy part of its business.

Didi didn’t respond to our request for comment on those future plans.

Didi Chuxing’s rebranded Xiaoju driver services division includes a refueling program for its drivers.

The company is saying more about the Xiaoju business itself. It said the services support drivers in over 257 cities through a network of 7,500 partners and distributors. There are some caveats, though: the auto care service is currently limited to seven cities in China.

Didi also went on the record with some financial data. The company claimed that annualized GMV for Xiaoju has jumped from 37 billion RMB ($5.4 billion) in April 2018 to 60 billion RMB ($8.76 billion) as of today. That’s impressive growth of 62 percent, and the forecast is that it will easily pass its previous goal of 90 billion RMB ($13.15 billion) for 2018 before this year is finished.

GMV, in this case, refers to the total value of goods and services crossing the Xiaoju platform. That help gives an idea of how active it is, but it doesn’t translate to revenue or profit/loss for Didi. The company didn’t provide information for either revenue or profitability for Xiaoju.

This year has been a notable one as the company has expanded its horizons for the first time by venturing outside of China.

Last year, Didi raised $4 billion to double down on technology, AI and move into new markets, and it has come good on that promise by entering MexicoAustralia and Taiwan. It also landed Brazil through the acquisition of local player and Uber rival 99 and it is preparing to go live in Japan, where it will operate a taxi-booking service through a joint venture with SoftBank.

Beyond that massive $4 billion raise, Didi recently landed a $500 million investment from Booking Holdings that’s aimed at providing strategic alliances between the Didi and the travel giant’s range of services. The company has raised over $17 billion from investors to date and it was last valued at $56 billion.

In Argentina, venture capital surges even as the broader economy stutters

Even as the Argentine government was announcing the biggest slide in the country’s economic output in nearly a decade, technology investors in the nation’s capital are all gearing up for record fundraising years. Three of the country’s biggest firms (which are still small by international standards) are raising new, exponentially larger, funds in a sign […]

Even as the Argentine government was announcing the biggest slide in the country’s economic output in nearly a decade, technology investors in the nation’s capital are all gearing up for record fundraising years.

Three of the country’s biggest firms (which are still small by international standards) are raising new, exponentially larger, funds in a sign that technology companies are showing promise despite the bleak picture painted by the broader economy in Latin America.

Leading the pack is NXTP Labs, the early stage investor that’s developing a regional network of accelerators and seed investment funds through partnerships that extend from Mexico City to Montevideo and Sao Paulo up to San Francisco. Despite its regional reach, home for NXTP is Buenos Aires and it’s there that the firm began accelerating and investing in early stage companies back in 2011.

NXTP has already had 13 exits, according to Crunchbase, and is perhaps the most mature of the crop of investment firms in the country. It’s also looking to be among the largest as it capitalizes on that track record of exists and a portfolio of investments that has raised follow-on capital of nearly half a billion dollars. 

The firm is currently knocking on doors to raise $120 million, a significant step up from its previous $38.5 million investment vehicle.

NXTP Labs isn’t the only firm based in Argentina that’s looking to significantly expand its capital under management. Jaguar Ventures, a firm that invests in both Argentina and Mexico, and Draper Cygnus, an Argentine-focused, Buenos Aires-based investment firm has already raised roughly $30 million of the $60 million it has targeted for its new fund,

While Cygnus is very much focused on the early-stage Argentine opportunity (which makes sense given the track record of technology companies coming out of the country — and the capital behind the firm) both NXTP and Jaguar have more of a regional perspective. And Jaguar, too, is massively increasing the size of its fund.

While its first fund was only $10 million, the new one will be closer to $60 million, according to one person with knowledge of the firm’s plans.

Behind the surge of confidence in the region’s technology fortunes, despite the economic turmoil that continues to roil the region, is a growing track record of valuable companies — all with a homebase in Latin America’s largest market.

And while Brazil remains the region’s undisputed economic powerhouse, there’re growing numbers of tech giants coming from Mexico, Argentina, Colombia, and Chile, investors said.

As Gonzalo Costa, a co-founder of NXTP Labs wrote in an editorial for TechCrunch earlier this week:

For the first time, companies are raising rounds of $100 million plus. 99 (acquired by Didi Chuxing), Nubank and Rappi, have all raised mega rounds in the past two years. Others have raised large rounds, such as Selina and Movile, with $90 million-plus, or Auth0 (part of our portfolio), with $50 million rounds in 2018. But the increase in dollar amounts is not only driven by mega rounds. More than 30 transactions of $3 million or more happened in 2017, which is triple in amount of rounds of that figure when compared to 2016. This shows a market maturity not seen before.

Not only are companies attracting more capital, but entrepreneurs are launching companies across a dizzying array of technology verticals.

These are companies like NubiMetrics, which provides competitive analysis and data for marketplaces like MercadoLibre; or Satellogic, which is developing a network of satellites for earth observation (and raised $27 million last year); or Pago Rural, which provides financing options for farmers in Latin America (and is raising a $20 million round, according to sources).

It’s clear that venture capital and tech in Argentina (and across Latin America) is having a moment. But with a broader base of local capital, it’s possible that this moment could become a movement. And that would have a profound effect on economies around the world.

Korean hotel firm Yanolja moves into Southeast Asia with $15M investment in Zen Rooms

Zen Rooms, the budget hotel network startup founded by Rocket Internet, had faced the deadpool earlier this year after a prospective funding deal collapsed, but now the business appears to have found a home. Korea’s Yanolja, a popular motel brand that has branched out into app-based hotel bookings, has made a strategic investment that could see it […]

Zen Rooms, the budget hotel network startup founded by Rocket Internet, had faced the deadpool earlier this year after a prospective funding deal collapsed, but now the business appears to have found a home. Korea’s Yanolja, a popular motel brand that has branched out into app-based hotel bookings, has made a strategic investment that could see it fully acquire the business.

Ten-year-old Yanolja is initially paying $15 million for an undisclosed “strategic non-controlling stake,” but it will retain the rights to buy 100 percent of the Zen Rooms business. Zen Rooms clarified that the acquisition is an option and not based on performance or financial metrics.

Founded by a former hotel worker, Lee Su-jin, Yanolja is best known for its lovel hotels although it is trying to clean up the general image of short-stay hotels by promoting them as destinations for business travelers, tourists and families, as noted by a Bloomberg profile story. The company has also grown its own app-based booking service which among the most used in its homeland with 20,000 rooms.

The company is reportedly planning an IPO, so expansion is on its mind.

For those reasons, Zen Rooms fits that new focus. The company borrowed the budget hotel model, first pioneered by SoftBank-backed Oyo in India, and brought it to Southeast Asia when it launched three years ago. The concept is simple, Zen Rooms guarantees minimum standards at all hotels including free WiFi, fresh towels and bedding, hot showers, etc all of which is controlled via a mobile app. Those standards are normal to most hotel stayers, but when traveling in the East, standards can vary wildly especially at budget hotels, which Zen Rooms is focused on.

For hotels, Zen Rooms manages the brand — and sometimes more — and it allows helps them tap the internet to find customers and bookings.

Today, Zen Rooms is active in six cities in Southeast Asia — it had previously also run operations in Brazil, Hong Kong and Sri Lanka — across which it claims to operate 1,000 hotel franchisees with an inventory of more than 7,000 rooms. Its rivals in Southeast Asia include Red Doorz, which raised $11 million earlier this year.

The startup has raised $8 million from investors to date, including a $4.1 million Series A last April that was led by Korea’s Redbadge Pacific and SBI Investment Korea with participation Asia Pacific Internet Group (APACIG), the joint venture fund in Asia between Rocket Internet and Qatari operator Ooredoo.

However, TechCrunch understands that a major funding deal of over $10 million fell apart in Q1 2018 which left the company with a rapidly depleting runway. As a result and as TechCrunch reported in March, the company was aggressively shopped to potential buyers, investors and rival companies in order to keep the business afloat.

Yanolja has come to the rescue but a full buy-out looks like it will be dependent on the company’s future performance, such is often the arrangement with strategic deals made with a view to full ownership. Rocket Internet, which remains a major investor in Zen Rooms, will hope that the deal goes as smoothly as Lazada, its e-commerce service that is now owned by Alibaba.

Lazada ran out of capital in similar circumstances in early 2016 and Alibaba, the Chinese internet giant, came to its aid with a $1 billion investment. Although that was a majority investment it wasn’t a full-on buyoutAlibaba later increased its holdings until it fully owned the business, and today it is a key part of the firm’s overseas expansion strategy.

Already, TechCrunch understands from one source that Zen Rooms has gone on a hiring spree in recent weeks after it closed the deal. It had earlier been forced to make cutbacks to its team as a result of cost-cutting following the collapse of the funding deal earlier in the year.

“We now have the capital to invest,” ZenRooms co-founder Kiren Tanna told TechCrunch. “The deal has been in discussion since earlier this year…. we are treating like an acquisition but this is step one.”

Tanna added that the company plans to focus on five markets in Southeast Asia, and an expansion to Vietnam may be in the pipeline soon.