Vanguard Strikes Again, Axes Valuation Of Ola By Another 27%

US-based investment firm Vanguard has reportedly cut the valuation of its stake in homegrown ride-hailing giant Ola, making it the second markdown this year. 

As per Techcrunch, the investment company marked down the valuation of its stake in the startup by 51.6% to $25 Mn at the end of May 2023 from $51.7 Mn it invested initially. 

This translates to a valuation of $3.5 Bn for Ola, a far cry from the peak $7.3 Bn at the end of 2021.

Vanguard reportedly holds 1,66,185 shares, or nearly 0.7% stake, in ANI Technologies, the parent company of the ride-hailing startup. 

It is pertinent to note that this is the second valuation markdown by Vanguard of Ola this year. The US-based firm trimmed the valuation of the ride-hailing startup on its books by 35% to $4.8 Bn as of February-end.

Between February and May, Vanguard has further trimmed down the value of its stake in Ola on its book by more than 27%.

Overall, this is the fourth valuation cut for Ola undertaken by Vanguard in the past three years. The investment first slashed the startup’s valuation by nearly half (45%) in 2020, and followed it up by trimming it further by 9.5% in 2021.

The development comes at a time when Ola has been engulfed by a host of controversies. Be it regulatory challenges or delayed financials or even mounting competition from peers such as Uber and BluSmart, the ride-hailing company has been grabbing headlines for all the wrong reasons lately. 

The company has laid off more than 2,500 employees since the beginning of the last year across multiple verticals and teams. While it has more or less shelved its public listing plans, it also undertook a massive restructuring drive to slash costs and shut cash-guzzling businesses. 

As if this was not enough, more than 350 Ola Cabs recently drowned during floods in Uttar Pradesh’s Noida in a parking yard, which almost sparked a major standoff with local law enforcement agencies.

Meanwhile, valuation markdowns are not new for the Indian startup ecosystem now amid the ongoing funding winter. A slew of homegrown big names have seen valuation cuts by investors over the last few months. 

Just a day ago, it was reported that US-based asset management company Fidelity Investments slashed the valuation of its stake in SaaS unicorn Gupshup by more than 20%. 

Earlier, Inc42 reported that Peak XV Partners was looking to significantly mark down the fair value of its investment in edtech giant BYJU’S. In July, Fidelity also cut the valuation of fintech startup Pine Labs by nearly 9.2% to $4.5 Bn.