Ride-hailing company Ola’s financial service arm, Ola Financial Services has picked up about Rs 205 crore from investment fund Falcon Edge and venture firm Matrix Partners as part of its first institutional financing round, regulatory filings show. The fundraising is through after the company separately raised $20 million in working capital debt. It seems the Bengaluru-based firm looks to bet on financial services in an attempt to diversify beyond its core ride-hailing business.

“The financial services space in India and in our global markets is significantly underserved due to

weak distribution, low trust and complicated products,” Bhavish Aggarwal, cofounder and CEO of Ola told employees. “We have a once in a lifetime opportunity to change this with the reach and capabilities of our core ride-sharing platform,” he said. The crisis wrought by the Covid-19 pandemic has meant there was a need for product innovation in the financial services space that were consumer and digital-first, Aggarwal added.

Short-term credit, mobile wallet, insurance, and utility bill payments are some of the existing services housed under Ola Money. In November, Ola had moved its financial services business out of parent ANI Technologies to raise capital separately for the independent entity.

As part of the potential funding, Vikram Vaidyanathan, MD at Matrix Partners has joined the board of Ola Financial Services. Ola’s ride-hailing business revenue dipped 95 per cent over the past two months amid a nationwide lockdown to prevent the spread of the Covid-19 virus. At a time when the market is expected to recover only gradually, Ola is sharpening its financial services offerings. Ola will fight incumbents like Paytm, PhonePe, AmazonPay and Google Pay and the yet to be launched WhatsApp Pay as it aims to build a full-fledged financial service offering.