Roadblocks of Ola

Bhavish Aggarwal, CEO, and Founder of Ola took an aggressive attempt at IPO for expansion and diversification. For instance, Ola targeted to set up 500 dark stores to expand the business and set a standard 30 minutes delivery in the country. So, they don’t want to limit till cabs but grow more in the competition of businesses like food or grocery delivery and the Ola S1 a subsidiary of Electric Vehicle selling company.

Let’s have a look at a few stats of stakeholders:

Aggarwal wants to position Ola as a super app in the run-up to the IPO. So, what makes him do so, is the revenue decline as Ola’s revenue fell by 60% from FY19 to FY21 which was Rs. 1090 crore and 90% revenue is from transportation and mobility. Hence, Diversification may give a better valuation to the company for IPO. The estimated valuation is Rs52,713 crore by “Traxcn”.

What new business is Ola looking for?

Ola entered into a food delivery app where they can see 15,000-30,000 delivery daily whereas Swiggy stands at 2,00,000-3,00,000 orders a day. Ola wants a slice of the booming of used car retailing space, where it plans to sell its vehicle and new other brands. Ola money is a fintech business where they can issue insurance to these cars. It also charges Rs1.5 for COVID insurance premium while booking cabs.

Now comes the roadblock…

Ola’s one of the main problems in the app itself, where all facilities are not availed at one platform and it restricts companies to extract data. All business does not interact with each other. Ola was not able to cross-pollinate data from each of these to drive higher lifetime value. For instance, Can they use mobility data to make customer profiles and figure out who are the customers whom they can sell Ola cars? The tech stack has not been built in a way to accommodate multiple businesses, but it was built as a mobility business.

However, its lack of tech chops is a result of its inability to hold on to talent. A good reengineering team can breakthrough and expand strategy into food delivery, groceries, used cars and fintech in a structured manner.

Thank you.

Regards,

Akash Rathod,

Kautilya,

IBS Mumbai.