Uber is once again sharpening its focus on India after the U.S. company announced it has landed a strategic investment from Tata Opportunities Fund (TOF), a third-party private equity fund sponsored by Tata Capital, one of India’s largest wealth management organizations.
The size of the investment has not been disclosed, but it is described as “significant.” TOF is around $600 million in size, of which $400 million has been committed to date across engineering, hotels, real estate and other verticals. The fund is backed by Tata Capital, and this closer alliance will help Uber “expand its services and solutions in India” using the fund and Tata Capital’s extensive network. The deal is also notably TOF’s first investment in a non-Indian company.
“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… We look forward to working with the team on innovative new opportunities to help both riders and drivers,” TOF Managing Partner Padmanabh Sinha said in a statement.
Uber has taken strategic funding to boost its businesses in Asia before. It landed capital from Chinese search giant Baidu back in December, in a move that gave Uber access to Baidu’s maps and other services, while in India in March, media firm Times Internet made a strategic investment in Uber. Tata is, for sure, potentially a very influential ally in Uber’s battle against Indian rival Ola, which is present in over 100 cities and has the support of SoftBank, Tiger Global and other heavy-hitting investors.
Tata Capital is a wholly-owned subsidiary of Tata Sons, a conglomerate with stakes in over 100 Indian businesses, including Tata Motors and Indian Hotels. This new deal raises an interesting situation since Ratan Tata, who is one of India’s highest profile businessmen and Chairman Emeritus of Tata Sons, made a personal investment in Ola last month.
Today’s investment news comes just weeks after Uber pledged to invest $1 billion to develop its business in India. In a recent Q&A with TechCrunch, representatives from Uber revealed that they expect the company’s business in India to surpass the U.S. over time, while it is committed to growing its service into tier-two, three and four cities in India. That’s important because Ola is closing in on 200 cities served and, while India is Uber’s second largest market based on locations served (18 cities in total), it is still well short of covering the country.