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Microsoft Considering $50-100 million Investment in Ola: Report

In a bid to give push to its cloud business, Microsoft is considering to invest $50 100 million in Indian ride hailing company Ola.

Microsoft Corp. is considering investment of $50-100 million (Rs320-640 crore) for a minority stake in ANI Technologies Pvt. Ltd – the parent company of Indian riding hailing company Ola – according to two people familiar with the matter.

If this investment does take place, then Ola will have to apparently migrate its cloud services from Amazon Web Services (AWS) to Microsoft’s Azure platform. Interestingly, Microsoft used the same strategy in the case of Flipkart. It invested nearly $200 million in the Bengaluru based e commerce major and later signed a lucrative could servicing contract with it.

Ola

Microsoft may invest nearly $100 million in Ola.

There is little doubt in the minds of analysts that Microsoft is pushing very hard to seize bigger market share in India’s cloud computing market. Microsoft’s CEO Satya Nadella has made no secret about this. Nadella’s aggressive strategy for the cloud business has already paid off as Azure has emerged as a big revenue generator for the software giant – even racing ahead of Amazon and Salesforce.

Nadella’s obsessive focus on cloud business is partly reflection of the fact that the company does not want to let the business opportunity slip as had happened in the mobile OS market. Microsoft’s lack of focus and aggressive strategy allowed Google’s Android to emerge as the monopoly leader, while Windows is still struggling to make a dent in the mobile OS market.

Ola is Desperate for Funds   

Meanwhile, Ola – a unicorn company – is desperate to raise funds amid dry spell in fund infusion in Indian startups. Although $50-100 million is a paltry amount, but counting a company like Microsoft as its investor would add lot of weightage to company’s profile.

Ola’s desperation for funds is understandable, given that its fiercest rival Uber has already grabbed a substantial market share from it. What also does not help Ola’s cause is the fact that Uber is world’s most valued Startup and has uninterrupted access to funds. Analysts also believe that Uber’s shocking exit from China last year has forced the company to sharpen its focus on the Indian market, putting additional pressure on Ola.

 

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