SoftBank invested in Ola rival Uber and tried to merge the two companies.
Startups, when they raise venture money to build their businesses, begin with a Series A round and then proceed through Series E, F or maybe G before going public. The Indian ride-hailing service Ola is a bit unusual: It just completed its Series J fundraising and is marching toward Series K, a letter almost unheard of by researchers that track such things.
“Bhavish is spurning SoftBank money as he doesn’t want to get diluted out of Ola,” said Mohandas Pai, venture capitalist and former chief financial officer of Infosys Ltd. “Founders become employees when someone sits on your board and tells you how to run the show.”“Softbank has been a great partner for us as we’ve grown our business,” a spokesman for the company said in a statement.
Aggarwal has also gone to the founders of India’s Snapdeal for advice on managing SoftBank, the people said. SoftBank invested in the e-commerce startup about five years ago and then tried to push the founders to sell out to a larger rival, Flipkart. When Snapdeal refused the deal, Son switched allegiances by stopping further investment in the company and put US$2.5 billion into Flipkart.
Aggarwal and Son reached the preliminary deal to inject more cash into the India startup in 2017. Under terms of the agreement, SoftBank would invest US$250 million right away and then plow the rest of the US$1.1 billion within six months, the people said. Aggarwal found himself fighting for control of his company. Ola had modified its corporate bylaws so any sale between investors would need approval of the board – effectively blocking the Tiger-SoftBank transaction. Aggarwal also knew that he couldn’t take more money from SoftBank; the preliminary US$1.1 billion deal died after six months when the two sides couldn’t reach a compromise.
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