Investing in India’s electric revolution: A case study of OLA electric

Abstract

Subject Area: Entrepreneurship, Strategy. Study Level/Applicability: The case is best suited for a course on Entrepreneurial Finance while introducing the sources of finance and a course on Private Equity and Venture capital, while discussing target screening. It exemplifies how new-age ventures can position themselves to attract investments and how venture capital firms use environmental scanning to identify potential investment opportunities. Designed for second-year MBA students, the case assumes familiarity with strategic management concepts like Porter’s Five Force and Resource-Based View. Case Overview: Amala Menon is a seasoned venture capitalist, strategist, sustainability enthusiast, and founder of Samrithi VentureCaptial and has been actively looking out for investment opportunities in the Electronic Vehicle (EV) space. Believing in the huge potential and the push received by supportive government policies in India, Amala is assessing Ola Electric Mobility Pvt. Ltd (Ola Electric) as an investable option among a list of growing players in the space. A wholly owned subsidiary of ANI Technologies Pvt. Ltd, the parent company of Ola Cabs, Ola Electric, valued at USD 5 billion as of 2022, was founded in 2017 to facilitate mass electric mobility and hence reduce emission and fuel dependency. Though crunching financial metrics and valuation numbers come in during assessing an investment option, she strongly emphasizes evaluating the organization’s readiness to obtain further funding in terms of its management team, the potential of the business model and several other crucial parameters. Ultimately, valuation exercise, according to her, aids founders and investors in confirming the strategic positioning of the venture and the business model’s validity. Hence, at this point, Amala, considering qualitative and quantitative aspects, is focused on assessing whether Ola is a wise investable option compared to its peers. Expected Learning Outcomes: This case study enables participants to: (1) Critically appraise investment prospects in new-age EV startups like Ola Electric considering industry-specific and organization-specific factors. (2) Explore both financial and non-financial factors crucial for evaluating Ola Electric’s potential as a promising investment. (3) Evaluate Ola Electric as a potential investment option by leveraging strategic frameworks such as Resource-Based View, Internal and External Factor Evaluation to formulate an investment recommendation. (4) Apply the insights gained from the environmental scan to guide Amala’s investment decision regarding Ola Electric.