Tata Opportunities Fund invests in Uber

Tata Capital's flagship private equity fund Tata Opportunities Fund (TOF) has invested an undisclosed amount in Uber Technologies Inc, which runs a ride-hailing app Uber, it said on Wednesday.

This is the first overseas investment by TOF and the third deal in as many months.

"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," said Padmanabh (Paddy) Sinha, managing partner of TOF.

TOF, a fund managed by Tata Capital's PE unit, had raised $600 million in 2013 with a mandate to back other Tata Group firms besides some other external companies.

Last month, it invested Rs 335 crore ($55 million) to buy a significant minority stake in Tata Projects Ltd (TPL), an engineering, procurement and construction (EPC) services company from other Tata group firms.

In late May, it had inked an agreement to invest up to Rs 250 crore ($39 million) for a minority stake in TVS Logistics Services Ltd.

For Uber, one of the two most valued startups globally along with Chinese handset maker Xiaomi, this adds to the list of Indian investors which have backed the firm.

As first reported by VCCircle, at least two Indian family offices invested in Uber in its latest funding round where it raised $1.2 billion led by China's Hillhouse Capital Group and other investors.

Both these family offices have significant exposure to India's burgeoning technology services and the internet space. They have individually committed 'multi million dollars' for buying into Uber.

Early this year, Times Internet Ltd, the digital arm of the Times of India Group, had inked a commercial marketing partnership with Uber which also included a small undisclosed investment to facilitate Uber's expansion in India.

Uber started its operations in India in October 2013 and is already present in 18 cities.

It claims to have over 150,000 cabs in its network with 40 per cent month-on-month growth.

Currently, it claims to offer around 200,000 daily rides in the country and expects to grow this five times by March 2016.

"Right now, we are 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," said Travis Kalanick, CEO of Uber Technologies.

In the past, Uber has raised funding from marquee investors like Fidelity Investments, Wellington Management, BlackRock Inc, Summit Partners, Google Ventures, Menlo Ventures, New Enterprise Associates (NEA) and Qatar Investment Authority. Uber was valued at $40 billion during its last round in December 2014.

Uber is facing a tough challenge from local giant Ola which had acquired TaxiForSure early this year to create a huge lead in terms of its network. Ola raised $400 million from DST Global and SoftBank among others early this year to maintain its dominance.

Interestingly, it also roped in Ratan Tata, chairman emeritus of Tata Sons, the private holding arm of the business conglomerate, as a small shareholder.

However, Uber is not willing to let go of the Indian market despite facing several roadblocks after it ran into regulatory authorities post a sexual assault by one of the drivers in its network on a passenger who booked a ride through its app in Delhi last December.

Recently, Uber roped in Amit Jain from Rent.com as president of Uber India with an eye on making further inroads into what has already become the company's largest market outside the US.

Jain announced that Uber will plough $1 billion in India over the next nine months to improve operations, expand into newer cities, develop payment solutions and establish a robust support network.