Funds operated by US-based investment major Vanguard Group have cut the value of their holdings in ANI Technologies, the parent firm of ride-hailing startup Ola, to USD 3.5 billion – down over 50% from a peak of USD 7.3 billion – regulatory filings made by the investor with the US Securities and Exchange Commission (SEC) on Monday showed.
The latest filing reflected Ola’s valuation as of May 31 in the investor’s books. Crossover funds, which invest both in publicly-traded and privately-held companies, periodically review the valuation of their portfolio companies.
The valuation cut comes at a time when a number of headline investors in multiple Indian startups have done the same, amid a global rout across public and private technology markets.
Recently, Netherlands-based tech investor Prosus slashed its valuation of beleaguered edtech firm Byju’s to about USD 5.1 billion from the USD 22 billion it last raised equity funding at, while US asset manager Invesco cut the valuation of food delivery major Swiggy to USD 5.5 billion from USD 8.2 billion in May.
Vanguard’s International Growth Fund now values its holding in Ola at USD 25.0 million, down from the USD 33.8 million valuation it assigned to its holding in its half-yearly report in May this year, and much lower than the about USD 50 million Vanguard assigned the stake in 2019.
This indicates a valuation of about USD 3.5 billion for the entire firm, down from USD 4.8 billion indicated by the investor’s report that reflected Ola’s valuation as of February 28. The mobility company last raised USD 139 million in December 2021 as part of a funding round, led by Edelweiss Private Equity.
The International Growth Fund holds 1,66,185 shares in the firm. Another Vanguard fund, the Variable Insurance Fund, also holds about 19,000 shares in Ola, taking Vanguard’s total stake in the company to 0.8%, as per Tracxn data.
An emailed request for comment to Ola did not elicit a response until publishing time.
Ola’s recalibration
Over the last year, Ola has exited a number of ventures in verticals such as second-hand car sales, food delivery, and grocery delivery, which it had diversified into as the pandemic hit the company’s core business. ET was the first to report that Ola would be shutting its quick-commerce and used-car marketplace in June last year. The firm now solely focuses on its core ride-hailing business.
These shutdowns were followed by the exit of several senior-level executives, including chief marketing officer Varun Dubey, Ola Cars (used-car business) chief executive Arun Sirdeshmukh, and Vinay Bhopatkar, who headed multiple businesses including food and grocery delivery.
Ola founder Bhavish Aggarwal has said on many occasions that the ride-hailing business was profitable. The firm, however, has not reported its financials for fiscal 2022 and 2023. ANI Technologies last reported a loss of Rs 1,116.6 crore on a revenue of Rs 1,168.2 crore for the fiscal year ended March, 2021.
Its sister firm Ola Electric, which is held separately, hasn’t reported its results for those years either, but a Reuters report said Ola Electric incurred an operating loss of USD 136 million on a revenue of USD 335 million in fiscal 2023.
In the meantime, its competitors have continued to make strides. Bangalore-based Rapido has expanded its three-wheeler category, while ONDC-run auto hailing firm Namma Yatri has also entered the mix.
In the cab category, all-electric cab company BluSmart, backed by BP Ventures, has raised multiple funding rounds and plans to expand its fleet above 10,000 by FY24. Uber has also signed a contract with Tata Motors to deploy more than 25,000 electric cars in the next three years.
Companies running electric cabs have a different business model as they either own or lease the cars and employ drivers, giving them significant control over the quality of the service that has deteriorated significantly after the pandemic. ET reported on January 4 that Ola was planning to pilot its own EV cab service in Bengaluru with about 1,000 cars.
