Who is Bhavish Aggarwal? A Man Behind India's First AI Unicorn and Its Own Version of Uber, Tesla

Birth of its first AI unicorn startup in India

Named Krutrim, this startup was founded in April 2023 and received over 50 million dollars in investment within a year. In December 2023, it garnered attention by unveiling "Ola Krutrim". 

Bhavish Aggarwal, one of the co-founders of Krutrim, had consistently shown interest in AI technology through social media even before starting this company. As major tech companies around the world are building their own AI language models, he has proclaimed that "India should lead this market." 

Currently, Krutrim is based in Bangalore, India, and San Francisco, USA. The tech startup, which has grown to an organization of 160 people, was established to develop a language model that generates text in English and eight Indian languages. 

The reason this news is interesting is because Bhavish Aggarwal is also the co-founder and CEO of Ola Cabs, a leading mobility app in India.

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Ola Cabs is "India's first taxi aggregator platform". Launched in Mumbai, India, in 2010, the service became a unicorn company by 2015. In 2018, it facilitated over one billion rides annually through Ola Cabs. 

At one point in 2021, the corporate value of its parent company, ANI Technologies, was estimated at 7.3 billion dollars. According to a 2020 Uber report, Ola Cabs had approximately 50% of the market share.

Currently, Bhavish Aggarwal's primary focus is actually on Ola Electric, a new venture that manufactures and sells electric two-wheelers. 

This subsidiary, established in 2017, was recognized for its corporate value of 5.4 billion dollars two years later, attracting investment from Singapore's government fund Temasek, SoftBank Vision Fund, and Tiger Global among others. 

This unicorn startup has embarked on an IPO for a 2024 listing. (Ola Electric is one of the subsidiaries of ANI Technologies.)

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How Ola Cabs Built Its 'Mobility Empire'

Initially a small startup founded in 2010 by two students from the Indian Institutes of Technology, Ola Cabs, now owned by ANI Technologies, has grown into India's premier taxi hailing platform.

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🔎The Genesis of Ola Cabs

The inception of Ola stemmed from a website called Olatrip.com, which offered weekend getaway and holiday packages. 

The catalyst for creating Ola was a harrowing taxi tour experience for an out-of-town trip. The driver stopped midway, demanding more money than what was originally agreed upon. When Bhavish Aggarwal refused to renegotiate, the driver abandoned him en route to his destination.

This unpleasant experience sparked the realization in Aggarwal that there was a dire need for quality taxi services. After discovering that others shared similar frustrations with taxi services, he pivoted to Ola Cabs. 

The startup came to life with the joining of co-founder Ankit Bhati as CTO. From its early days, instead of owning taxis directly, the service leveraged the 'sharing economy' model to kick start its operations.

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🔥The Early Startup Hustle

For an early-stage startup, the platform business was a formidable challenge. 

There were instances when the driver matched with a passenger failed to show up, compelling the founders themselves to drive the customers to their desired destinations. They also went through grueling coding marathons, staying awake for up to 48 hours. 

However, this founding team never stopped hustling, believing firmly in the scalability of their business model by 2011.

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📈Evolving into a Mobility Super App

Over time, Ola Cabs transformed into the 'Indian Uber,' expanding its services and subsidiaries. 

Beyond car booking, it broadened its scope to include hourly taxi rentals, a premium subscription model, a bicycle-sharing venture, and even a used car service. It also ventured into the food delivery service based on the Ghost/Cloud Kitchen model. 

With commissions as its primary revenue source, Ola Cabs expanded its service area to include Australia, New Zealand, and the United Kingdom.

As a subsidiary of ANI Technologies, Ola Financial Services is also part of the conglomerate. As indicated by its name, Ola is engaged in the fintech business. This encompasses a wide array of financial services, including digital payments and wallet services, as well as selling credit cards and insurance products. 

In the first quarter of 2022, this subsidiary saw its revenue jump by 157% year-over-year, turning a profit. Clearly, fintech is a fitting complement to the mobile mobility platform.

(Refer to : Ola Financial Services Turns Profitable In FY22, Posts INR 9 Cr Profit) 

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India's Electric Two-Wheeler Market and Ola Electric

Since 2019, Bhavish Aggarwal has been focusing his efforts on Ola Electric, among various ventures of Ola.

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🛵Growth of India's Electric Two-Wheeler Market

India's electric two-wheeler market is being recognized as a rapidly growing sector. 

According to a McKinsey report from September 2023, India's electric two-wheeler market grew by 24% in February 2024 alone, with a market penetration of 5.7%. Considering motorcycles and scooters nearly account for 70% of India's mobility ecosystem, electric two-wheelers represent a rapidly expanding sector with significant growth potential.

Ola Electric astonishingly holds a 41.1% market share in the burgeoning Indian electric two-wheeler market, a considerable figure. As of February 2024, based on vehicle sales, Ola Electric's registrations were more than double those of the second-place company, TVS MOTOR, with 50,538 units. Despite the presence of various competitors, this startup strives to solidify its leading position.

According to Ola Electric, when it first launched its product in August 2021, the electric two-wheeler adoption rate in India was less than 1%. Now, it has increased to a level of 6-8%, indicating significant growth in just a year and a half. This rapid expansion of the industry suggests why Bhavish Aggarwal decided to focus entirely on Ola Electric after discontinuing vehicle content services like Ola Play in 2019.

(Refer to : Ola To Shut Infotainment Service Ola Play)

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🧐Challenges Facing Ola Electric

Currently, Ola Electric is ramping up its efforts in battery and electric vehicle development and production, including establishing battery factories, as it surpasses annual sales of over 250,000 electric two-wheelers. 

The move towards an IPO in 2024 is also seen as a way to fund additional battery factory constructions and increase research and development expenses, while supporting the startup that continues to operate at a loss.

However, Ola Electric's journey to becoming the leader in electric two-wheelers is not without its challenges:

1.Competitive Pressure

• Several competitors, including Honda and Hero, are entering the Indian electric two-wheeler market. The scenario is reminiscent of Ola Cabs’ battle for market share with global competitors like Uber India. With India becoming a focal point in the mobility market, competition is inevitable.

2.Reduction in Government Subsidies

• One of the biggest incentives for Indian consumers to purchase electric two-wheelers has been government subsidies. However, the trend of reducing government subsidies for electric scooters may make these products less appealing to consumers.

3.Venture Investment Winter

• Ola Electric was initiated during a period when Ola Cabs was experiencing explosive growth due to venture capital investment. 
• However, the current macroeconomic situation and venture capital market are not as favorable as before, which might be why Ola Electric decided to pursue an IPO to raise funds from the public market. 
• The market atmosphere has changed compared to 3~4 years ago when unicorn startups were eagerly going public. Many tech startups have since witnessed long and significant stock price declines post-IPO. 
• There’s a prevailing caution in the market suggesting that even promising ventures might not guarantee profitability or scalability.

These challenges underscore the complexities of scaling in a rapidly evolving and highly competitive market, emphasizing the need for strategic planning and innovation.

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Could the 'Indian Uber' Become a Rival to Tesla?

On April Fool's Day in 2024, Ola Electric made a surprise announcement of its autonomous scooter prototype(Ola Solo). Some viewers of the prototype test drive video claimed it was an "April Fool's joke."

However, Bhavish Aggarwal affirmed that the company is seriously developing this prototype. The founder, who initially created a taxi-sharing app and then ventured into manufacturing electric scooters, is now also exploring autonomous electric scooters after delving into generative AI startups.

As a result, Bhavish Aggarwal often finds himself compared to or in contention with figures such as Tesla's founder and CEO, Elon Musk, and Uber's CEO, Dara Khosrowshahi.

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🚕Spat Between Uber's CEO and Ola's CEO

Uber, having established "Uber India," emerged as a direct competitor in the Indian mobility market. 

Being a latecomer to the Indian market doesn't make things easy for Uber. However, Uber CEO Dara Khosrowshahi has emphasized that "India is the gateway to the world." By diversifying its mobility functions, including two-wheelers, three-wheelers, and bus services, Uber is actively increasing its revenue in the Indian market.

In an interview, the Uber CEO mentioned that "Uber would lead the vehicle-sharing business while Ola gets distracted by electric vehicles and other sectors." 

In response, Bhavish Aggarwal, in an interview with Business Standard, pointedly remarked that "Mr. Uber is behind anyway." The founder also added that, for the fiscal year 2023 (FY23), Ola's revenue was three times that of Uber's local revenue.

(Meanwhile, Ola Cabs and Uber face the threat of antitrust lawsuits from local taxi companies. The city of Delhi has taken measures to ban taxis not registered in the car-sharing app from operating, citing air pollution issues.)

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🤖What Do Tesla and Ola Have in Common?

With the announcement of tariff concessions for global electric vehicle manufacturers in 2024, Tesla's demand for a significant reduction in India's automotive import duties to about 70% if it establishes a factory in India has been realized. 

While Elon Musk has been publicly engaging in a tug-of-war over the conditions for establishing an electric vehicle manufacturing plant and importing electric vehicles, Bhavish Aggarwal directly challenged Tesla's entry into India with critical/witty tweets. Signs are emerging of an intensifying mobility competition between Uber, Tesla, and Ola.

(Refer to : Tesla at the gates, India rolls out red carpet for global EV makers)
(Refer to : Tesla scouts sites for $3bn India car plant in boost for Modi)

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Would it be odd to think of Tesla's autonomous vehicles while looking at Ola Electric's autonomous scooter MVP? Both share the commonality of selling software wrapped in EV hardware. Therefore, examining what Tesla is eagerly investing in lately could provide insights into Ola's future prospects.

From the end of 2023 to the beginning of 2024, Tesla has been making groundbreaking announcements. 

In December 2023, it revealed the AI-based humanoid robot "Optimus 2nd Generation" to the public. Since initiating the "humanoid robot development project" in 2021, the product is now nearing its launch. 

In Addition, in January 2024, Tesla announced a $500 million investment in a supercomputer project named Dojo. This supercomputer is expected to serve as the foundation for full autonomous driving and AI robots.

Tesla's strategy is divided into two tracks: developing software that goes into hardware and enhancing the hardware that supports the software, converging on the keyword "artificial intelligence". 

Tesla aims for revenue diversification by offering its autonomous driving system, which perceives its surroundings through cameras, as a subscription service. Similarly, the humanoid robot will not only focus on hardware development but also hinge critically on artificial intelligence both technically and business-wise.

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Returning to Ola, Ola Electric is keen on creating electric vehicle products, accelerating the construction of manufacturing plants for electric scooters, and has developed a prototype electric scooter equipped with a fully autonomous driving mode. 

This mirrors Tesla's approach in both hardware and software development. It's conceivable that Bhavish Aggarwal's Ola is positioning itself not just in the mobility hardware market but also aiming to compete with Tesla in the software arena.

This ambition suggests a broader vision for Ola Electric beyond manufacturing electric two-wheelers. By venturing into autonomous technology and potentially software services related to mobility, Ola Electric is not just expanding its product line but is also tapping into the significant potential of AI and autonomous systems. 

This parallels Tesla’s strategy of integrating advanced software with its electric vehicles to offer unique capabilities such as autonomous driving.

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Indian Serial Entrepreneur in the Mobility and AI War

The fact that Bhavish Aggarwal, the founder of Ola, is also one of the founders of India's first AI unicorn, Krutrim, is likely no coincidence. 

In the journey from a mobility platform to future revenue diversification and gaining a competitive edge in business, software prowess is indispensable. In this context, both Ola Electric and Krutrim's active embrace of AI might be aimed at securing a leading position in the market.

Certainly, 'Applied AI' and 'Generative AI' represent different technological domains. 

In the mobility market, there is currently more focus on Applied AI than Generative AI. Applied AI is crucial for training autonomous driving systems in virtual environments and for enabling AI to quickly and appropriately respond to external conditions. 

Therefore, it might be challenging to directly connect Krutirm's development of Generative AI chatbots to Ola's AI endeavors.

(Refer to : What technology trends are shaping the mobility sector? | McKinsey) 

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However, the broader implication is that Aggarwal's ventures into both mobility and AI signal a strategic vision that goes beyond individual product categories. 

By leveraging AI, whether applied or generative, these ventures can potentially unlock new efficiencies, capabilities, and market opportunities. The integration of AI into mobility solutions, for instance, could enhance safety, optimize operations, and create more personalized user experiences.

In essence, Aggarwal's involvement in both fields reflects a holistic approach to innovation, where mobility and AI intersect to drive future growth. Whether this strategy will lead to victory in the mobility and AI wars remains to be seen, but it positions Aggarwal and his ventures at the forefront of technological advancement.

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Written by Jinny (underdogs)

UNDERDOGS ORIGINALS