Matrix Partners denies exiting Ola, calls it a 'winning horse'

Referring to Ola as "the winning horse", Matrix Partners India, one of its key and early investors, told dna that it was not looking to exit from the taxi-hailing start-up by selling the stake to rival Uber.

Avnish Bajaj, managing director of Matrix Partners India, who spoke to dna, was reacting to a report titled 'Uber may drive Ola away with controlling stake' that appeared on Friday.

"We (Ola) are winning. As far as we are concerned, as investors, we are in the winning horse. So, there is no reason we would be looking to do anything (exit) right now," said Bajaj.

He further added, "Even if we were approached, we have no such intention (to sell stake). I am in the business of investing and exiting, and I am telling you that we have no intention, whatsoever, of exiting to Uber because we believe we are pulling away and gaining market share (from Uber)".

A source, who spoke to dna on condition of anonymity, claimed that an acquisition deal was in the works, where Uber could buy controlling stake in the Bangalore based firm, which was founded by Bhavesh Aggarwal and Ankit Bhati in 2010.

Bajaj, who claimed that he was a "significant investor in Ola and on its Board", said the information that Uber was picking up controlling stake in his company is far from the truth.

"If, any of this was in any way true, we would have danced around this topic. It could not be further from the truth. It is absolutely not true and no discussions have been happening," he said.

According to him, the information comes out from the fact that "the market share changes in the last few months have been dramatically in our (Ola's) favour".

"I don't know if you are aware; the micro (cab) category, which in our view, is going to be larger than Uber's entire business. So, I have been seeing Uber doing things in India, which we have not seen them do in other places; such as placing of front page newspaper ads. They are cutting prices dramatically," said Bajaj.

Further, the Ola investor said since the taxi-aggregation start-up was "well-funded", there was no reason for a distress sale of stake by any investor.

"We are extremely well-funded. We have some of the largest investors in the world and have enough money to get us to profitability, if we want to. So, why would we do that (sell to Uber)?" asks Bajaj.

A host of marquee investors like SoftBank, Tiger Global, Sequoia Capital and others have put in money in Ola. Late last year, it had raised $500 million from Baillie Gifford, Tiger Global, SoftBank Group and others to intensify its fight against Uber and Meru, another reasonably significant player in the market.

On the $4-billion valuation of Ola, Bajaj said, "We never confirm or deny any valuation, but the reality is that the last valuation reported all over the place was $5billion".

He further said, "The valuation of Uber is $60-plus billion. The valuation of the leading player in China is rumoured to be $23-25 billion. So, you know these are very large businesses. That's the only thing I can comment. I cannot comment on any specific number".

According to Bajaj, the valuation of cab aggregation business around the world reflected the potential of its growth as an alternative mode to transport.

"This utility is going to be used and it's a 10X (10 times) over any alternative mode of transport, in terms of experience. Therefore, it becomes a very large business globally, which gets reflected in its valuation. Valuation, ultimately, is about what price a buyer is willing to pay and the seller willing to sell," he explained.

Uber and Ola are engaged in a bitter war for market share.