Vanguard, the renowned U.S. index fund pioneer, has recently reduced the valuation of its holding in the Indian ride-hailing giant Ola by a staggering 52%. The worth of its shares in Ani Technologies, Ola’s holding firm, has been marked down by 51.6% as of the end of May, according to the company’s filings.
The asset manager has now valued its Ola shares at $25 million, down from the original purchase price of $51.7 million made years ago. This significant valuation cut suggests that Ola’s overall worth has dwindled to around $3.5 billion, a sharp drop from its previous valuation of $7.3 billion at the end of 2021. Notably, in February of this year, Vanguard had valued Ola’s shares at approximately $33.8 million.
Ola, a ride-hailing startup founded over a decade ago, has successfully raised more than $3.9 billion throughout its journey, according to data from Crunchbase, Pitchbook, and Tracxn.
Amidst the challenging market conditions, several high-profile Indian startups have faced similar valuation reductions from investors. For instance, Invesco slashed Swiggy’s valuation by nearly half to $5.5 billion in January of this year, and Prosus reduced the valuation of Indian edtech giant Byju’s to approximately $5.1 billion. Additionally, Fidelity marked down the worth of its holding in SaaS startup Gupshup by over 50%, as reported earlier.
These recent valuation cuts underscore the impact of the deteriorating global market conditions on Indian startups. The funding activities within India’s startup ecosystem experienced a dip last year, while the valuations of many larger startups remained unchanged, thanks to strategies such as raising capital through convertible notes or opting not to raise funds at all.
It’s worth mentioning that different investors employ various methods to evaluate the equity value of their existing startup portfolios. Therefore, a substantial valuation adjustment made by one investor may not necessarily reflect the views of other investors in the startup. The current trend of valuation adjustments provides valuable insights into the evolving dynamics of the Indian startup landscape amid the global economic situation.
