Tata Opportunities Fund to Invest up to $100 Million in Uber

San Francisco-based company’s India President Amit Jain said investment will allow Uber to expand into more cities

An Indian cab driver displays the city map on a smartphone provided by Uber as he drives in New Delhi, India, July 31, 2015. Tata Opportunities is investing between $75 million to $100 million in Uber globally, a person with knowledge of the figures, who asked not to be named, said. PHOTO: SAURABH DAS/ASSOCIATED PRESS

NEW DELHI—Uber Technologies Inc. has raised up to $100 million from Indian private-equity firm Tata Opportunities Fund, a person familiar with the matter said, as it seeks to accelerate its ride-hailing business in the company’s biggest market outside the U.S. by cities served.

The San Francisco-based company’s India President Amit Jain on Wednesday declined to say how big the investment would be but said it would allow Uber to “expand and grow into more cities” and to roll out “many more products that are customized to the India market.”

Without confirming the size of the investment, Amit Jain, president of Uber India told TOI that the deal was financial and strategic in nature and that the cab startup would look at opportunities to work with the Tata group going forward. He, however, did not elaborate on these initiatives. 

Tata Opportunities is investing between $75 million to $100 million in Uber globally, a person with knowledge of the figures, who asked not to be named, said.

Late last month, Uber announced plans to pour $1 billion into India, a country where the firm has faced regulatory hurdles to its operations but which it regards as one of its most-important markets.

Padmanabh Sinha, managing partner of TOF's advisory team in India, said this was the fund's first tech investment and was in line with the mandate to back companies across all stages. "Uber has been transformational and is differentiated in many ways. We invest in companies which are in a high cash burn mode but then they have a clear path to profitability drawn up," he told TOI. 

In a prepared statement, Uber's co-founder & CEO, Travis Kalanick, said, "We're particularly focused on building a great service for hundreds of millions of Indians — and Tata's leadership and experience will be crucial in helping us meet this important goal". 

This new financing round which has not been officially announced by Uber yet saw it raise $1 billion from Microsoft Corp. and the investment arm of Bennett Coleman & Co, the publisher of this paper, among others, as per recent media reports. Uber has not confirmed any of the other investor names. 

Recently, Uber announced it will deploy $1 billion in India over the next six to nine month, just like it did in China, to corner market share from Ola. The funding announcement made on Wednesday is separate from the India investment allocation, Jain of Uber said. 

A lot of the $1 billion that's being allocated to India will be used in doling out discounts and promotions by Uber which is presently operational in 18 cities in India. 

Its other strategic partnerships include that with Baidu in China, and AmericaMovil in Latin America. Present across 60 countries, Uber has been constantly embroiled in regulatory issues across the world. Having entered India two years back, Uber has had to make changes to its strategy in order to adhere to the local regulations here.

Starting with introducing new payment methods like mobile wallets and now cash, some of the cab startup's "non-negotiables" had to be reworked to suit the Indian market. Jain said the strategy would be to continue to expand into newer cities from the current 18, launch new products and experiment with different payment options. 

Uber's rival Bengaluru-based Ola, backed by DST Global, Softbank and Tiger Global among others, is in the midst of raising $500 million at a $5 billion valuation which will see a two-part close, as reported by TOI. It claims to be doing as many as 750,000 rides a day while Uber said while announcing its $1 billion investment plan that it is aiming at completing 1 million rides over the next 9 months from the present 2,00,000.

Mr. Jain said Uber was working with regulators in India who are formulating new guidelines to allow app-based transport aggregators to operate. - TNN