Tata Group rides on Uber with PE investment
Tata Opportunities Fund on Wednesday said it will invest in Uber making it the first global investment by the Tata fund and extending the Tata group’s ongoing support of digital ventures.business Updated: Aug 20, 2015 00:25 IST
Tata Opportunities Fund, a flagship private equity fund advised by Tata Capital, on Wednesday said it will invest in Uber, the fast growing taxi booking application provider, making it the first global investment by the Tata fund and extending the Tata group’s ongoing support of digital ventures.
While financial details of the funding were not disclosed, Tata Opportunities Fund typically has an average investment ticket size of $50-100 million.
The partnership will help Uber expand its services and solutions in India by leveraging the Tata Opportunities Fund’s network within the wider Tata Group as well as externally. According to the fund, Uber India’s rides are currently growing 40% every month.
“The Tata Opportunities Fund is delighted to support Uber’s growth and continued success around the globe, more recently in China and India. Uber’s technology continues to transform the way millions of people commute while creating economic opportunities for hundreds of thousands of first time entrepreneurs (drivers and owners), who value the flexibility it offers,” said Padmanabh Sinha, managing partner of TOF’s advisory team in India. “It is why Uber has grown at such an astonishing rate and continues to lead the way in the Internet economy. We look forward to working with the team on innovative new opportunities to help both riders and drivers,” he added.
Incidentally, Tata group chairman emeritus Ratan Tata had recently invested an undisclosed amount from his personal investment vehicle, in Uber's competitor, Ola.
Car booking applications or apps, like Uber, Ola, Taxiforsure have grown fast in the past year as more people have access to smartphones and to the internet. The popularity has also led to a corresponding rise in sales of taxi-friendly sedans, boosting auto companies such as Maruti Suzuki, Toyota, Tata Motors.
US-based Uber, which had launched here two years back, had recently said it expects India to overtake its US operations and had also committed to invest $1 billion to grow the India business. “Tata is synonymous with entrepreneurialism in India and I am incredibly excited to have the Tata Opportunities Fund on board as a partner,” said Travis Kalanick, CEO of Uber Technologies. “Our goal is simple: reliable and affordable transportation at the push of a button everywhere, for everyone. Right now, we’re particularly focused on building a great service for hundreds of millions of Indians - Tata’s leadership and experience will be crucial in helping us meet this important goal”.
Uber’s service is now available in 18 Indian cities, more than in any other country outside the United States and has a current base of over 150,000 driver entrepreneurs. A Tata statement said that Uber is growing 40% month-on-month and has a market share of over 35%.
Uber’s partnership with the Tata Opportunities Fund follows other strategic relationships with Baidu in China, AmericaMovil in Latin America, and American Express in the US.
The Tata Opportunities Fund (TOF) is a third party private equity fund with a mandate to invest in exclusive situations with market leading businesses which benefit from TOF’s relationship with the Tata group.
TOF completed the final close of its fund in early 2013 with commitments of about $600 million from marquee global investors. Excluding this investment, the fund has till date committed about $400 million to multiple sector leaders including Ginger Hotels, Tata Sky, Varroc Engineering, Shriram Properties, Tata Projects and TVS Logistics.
Tata Capital manages about $6 billion in advances and a further $1 billion in private equity assets.
Tata Sons, the holding company of the group, recently announced its plan to develop three digital initiatives, in e-commerce, health platform and big data analytics. Ratan Tata has also invested in about 10 start-ups through his personal investment vehicle.