BANGALORE • India’s Ola Cabs is raising US$300 million (RM1.22 billion) from Hyundai Motor Group, giving the ride-hailing start-up more capital to compete for drivers and customers against Uber Technologies Inc just as the US rival prepares for an initial public offering.

The deal values Ola at about US$6 billion, said a person familiar with the matter, asking not to be named because the figures are private.

The Bangalore-based company, which had been valued at US$4.3 billion according to CB Insights, will continue to raise funds and has term sheets from other investors, the person said. Last month, Ola announced an investment of more than US$90 million from Sachin Bansal, co-founder of local e-commerce pioneer Flipkart Online Services Pte Ltd.

Ola’s fundraising demonstrates Ola co-founder Bhavish Aggarwal, is willing to wage a pitched, costly battle for market share in the enormous market.

“We’re very excited about our partnership with Hyundai,” Aggarwal said in a statement.

Hyundai last year agreed to invest US$250 million into Singapore’s ride-hailing service Grab and sell a fleet of electric vehicles to the company. The two companies are working on electric vehicle (EV) pilot projects in Singapore to collect consumer and driving data.

The latest investment is aimed at creating a strategic partnership between ANI Technologies Pte Ltd, Ola’s parent, and the South Korean automaker’s Hyundai and Kia operations. The trio will collaborate on creating and managing a fleet with financing and insurance benefits for drivers. They will also work on developing EVs and charging infrastructure for the Indian market.

“India is the centrepiece of Hyundai’s strategy to gain leadership in the global mobility market and our partnership with Ola will certainly accelerate our efforts to transform into a smart mobility solutions provider,” said Euisun Chung, executive vice chairman of Hyundai.

The companies will coordinate to develop cars for the specific needs of the ride-hailing market, said Aggarwal, who is Ola’s CEO.

Ola currently has 1.3 million drivers on its platform and users across 125 cities in India, Australia, New Zealand and the UK. — Bloomberg