Soneone explain rationale here !
" but ola has innovation" , " kya matlab founder ke IIT se hone se valuation multiple jayada nhi hona chahiye" , " ola full indian saar. Support ola IPO saar. Lose your money while investors and founder make a lot saar" , " bro but ola founder ne Sanskrit waala chatgpt banaya hai. He sapports indian culture. So higher multiple to Banta hai" .
Prepare to hear this in coming days
No other word for this, but desh me ye sab bolne vale chutiyon ki kami to nahi hi h
I have read that adding digital in front of any traditional business makes it worth a lot more and the PE of digital businesses is much higher than that of traditional businesses due to exponential growth potential of internet as per investors. Thats why so much difference
9/10 founders recommend putting AI also somewhere in the startup name for higher valuation. Even if you are just using if else statements in your code
Ah yes, my Ola Electric bike will be a good vehicle to surf through the exponentially growing internet. But I get what you are saying. The inflow of VC money from the US and their mathematics behind valuations is nowing sipping into IPOs
More direct comparison would be Ather which is at 4x revenue/sales multiple ($900mn/$225mn)
Even giving Ola Electric an 8x multiple (best case, mass-market EVs), the valuation should be only $3bn
Company’s valuation is not only based on their current situation, but their future potential. I am not here justifying or supporting ola, but this valuation is mostly due to
So the higher premium
If we compare it with Hero. Hero is a 40 yrs old company with 20+ active products to reach this scale. Where as Ola has reached this scale within 5 yrs (remember for OEMs lot of time goes in R&D and setting up factories as well, so not actually 5 yrs of selling) and is growing at much faster pace as compared to Hero
It's a bubble. Don't you think Hero can't make two wheeler EVs? Ola themselves used a Nordic country design initially with stiff suspension. What investors don't realize there's magnitudes of difference in R&D costs for ICE vs EV? You can ride in the short wave for sure if you want to but keep in mind it's easy to come up with OE competition that way similar to Mamaearth.
Also, you are forgetting about Ather which does higher revenue. OE is trying to maximise revenue and scale but not profitability. How are they handling stoppage of Fame 2 subsidy?
By bubble you mean Ola Valuation or EV market? Hero can and they are actually doing it. But they still lack the conviction to go full throttle on EVs. That is why they keep investing in Ather to keep their options open but still plag safe.
Yes I know the company OLA acquired to get their product and R&D but then except Ather who didn’t? Some of them are actually buying scooters from china and selling in India with their brand name. Also if you will check statista report on EV market share, Ather is at 5th position with 11%. Ola, okinawa, hero electric and Ampere is ahead of them. With Ola 21% market share, nearest to ola is Okinawa with 13%. So you see Ola is dominating the market. And the key is distribution. Ather has super scooter, i love them. But they lack marketing and distribution. Whereas Okinawa, making china sourced rebranded poor quality scooters, is selling more than Ather because of distribution. That is why Ola becomes obvious choice for investors, if they want to invest in EV OEMs in India.
