Indian ride-hailing app Ola, which is competing with Uber in the fast-growing Indian shared transport market and is trying to expand its market in the UK, has invested $100m in the scooter-sharing start-up Vogo.
Vogo, had launched its service eight months ago, and has 2,000 scooters in the cities of Bangalore and Hyderabad in India. It will use the funds from Ola to acquire 100,000 new scooters that will be rolled out in these two cities over the next year. It allows commuters to pick up and drop off its moped-style motor scooters from about 200 service points in the neighbourhoods where it operates. And Ola is planning for its customers to be able to book Vogo’s motor scooters directly from the Ola app.
This year, Ola also participated in an earlier funding round in August and is also backed by Japan's SoftBank. But Ola’s latest investment will make the company one of Vogo’s largest shareholders, it is understood.
Pawan Munjal, the chairman and chief executive of HeroMotor Corp, India’s largest two-wheeler manufacturer, and Matrix Partners India, an early stage venture capital fund have backed Vogo.
The investment is Ola’s latest effort to diversify its product offering as it battles with Uber for dominance in India’s transport market. The cab company also launched services in Australia earlier this year. Besides offering a traditional ride-hailing service in cars, the Ola platform currently gives Indian commuters the ability to hail auto-rickshaws and motorcycle taxis in many cities.
Vogo is betting that in India’s congested cities, with their ever-worsening traffic jams, motor scooters will be one of the fastest, most affordable forms of transport. However, Vogo nevertheless faces competition from rivals such as Bangalore-based scooter-sharing app Bounce, which offers its services in 13 locations, including popular tourist spots. Ola’s move into shared motor scooters reflects how fledgling bike and scooter sharing companies could affect ride-hailing apps, particularly for consumers seeking to make short-trips in urban centres. In the past year, Uber and its US rival Lyft each bought bike-sharing rental services. More recently, Uber has been eyeing Lime and its rival Bird — two companies that offer US commuters access to stand-up electric scooters in big cities.
“Our investment in Vogo will help build a smart multi-modal network for first-last mile connectivity in the country,” Ola co-founder and Chief Executive Officer Bhavish Aggarwal said in the statement.
