US investor Vanguard marks down Ola's valuation by 35% to $4.8 billion

US-based investment management firm Vanguard Group has marked down the valuation of ANI Technologies, the parent company of ride-hailing firm Ola, by about 35 per cent to $4.8 billion from $7.4 billion, according to a filing.

The value of Ola’s shares held by Vanguard Group funds fell to around $203.78 as of February 28, 2023, from $311.85 in August 31, 2022. This is according to regulatory filings with the US’ Securities and Exchange Commission (SEC). 

Vanguard reportedly has about 0.7 per cent stake in the ride-hailing firm.

In December 2021, the mobility platform raised about $139 million from a few investors, including IIFL, Edelweiss, and Sunil Munjal-led Hero Enterprise. This is according to regulatory documents sourced from business intelligence platform Tofler.

Bhavish Aggarwal-led Ola had been valued at about $7.3 billion that time. The company declined to comment on its valuation being slashed by Vanguard.

This is not the first time Vanguard has marked down the valuation of the Bengaluru-based firm. In 2017, Vanguard marked down Ola’s valuation by 40 per cent. This indicated a valuation of about $3 billion, down from the company’s $5 billion when it last raised $500 million in November 2015. Vanguard later marked up the valuation in subsequent months.

The firm reportedly cut the value of its investment by 45 per cent between December 2019 and June 2020 and 9.5 per cent in 2021, reducing Ola’s valuation from over $6 billion to around $3 billion.

The new markdown comes at a time when Ola shut its in-cab infotainment service on November 15 last year. Last year, the company shut down its used vehicles business Ola Cars and its quick-commerce unit Ola Dash, which promised 10-minute food delivery.

It repurposed the infrastructure and capabilities of Ola Cars business towards boosting the Ola Electric sales and service network. The company shut down Ola Cars within a year of its launch as it shifted focus to its electric two-wheeler and car verticals. Ola has so far shut down Ola Cafe, Food Panda, Ola Foods, and Ola Dash.

Last year, the SoftBank-backed mobility platform laid off 400-500 employees in a move aimed at driving cost efficiency, according to the sources.

Ola has raised a total funding of $5 billion from investors including SoftBank, Tiger Global, Sequoia Capital and Accel. Ola reported its first operating profit of Rs 89.82 crore for 2020-21, even as its revenue declined 65 per cent to Rs 689.61 crore amid Covid-induced lockdowns.

ANI Technologies had reported a standalone operating profit (profit before finance cost, depreciation, amortisation and tax or EBITDA) of Rs 89.82 crore in FY21 on a standalone basis. It had registered a loss of Rs 610.18 crore in the previous financial year, according to the regulatory documents of Tofler.

Ola is among an increasing number of tech companies facing valuation mark downs. This is because it is witnessing steep losses and laying off employees amid a funding winter and macroeconomic uncertainties.

US investment firm Invesco, which led Swiggy’s previous funding round, has marked down the food delivery firm’s valuation by 33 per cent from $8.2 billion to about $5.5 billion. In January last year, Swiggy raised $700 million in Invesco-led funding, which made the outfit a decacorn, almost doubling its valuation to $10.7 billion.

US-based asset manager BlackRock has reportedly reduced the valuation of Byju’s by about 50 per cent to $11.5 billion. This is a sharp decrease from the $22 billion at which the edtech decacorn was valued at in 2022.