The last few months haven’t been easy for Indian startups — they’ve found it hard to raise money, they’ve been forced to shut down parts of their businesses, and they’ve had to lay off thousands of employees. But amidst all this, investors too have re-evaluted their estimates of their valuations, and some of India’s top startups haven’t come out looking so great. Several big startup names have seen their valuations slashed by their own investors this year. These are some of the most prominent ones.
1. Byju’s
Peak valuation: $22 billion
Current valuation: $5.79 billion
Fall in valuation: 73 percent
Byju’s is India’s most valuable startup having last raised funds at a valuation of $22 billion, but it’s had a torrid last few months. It’s not only delayed filing its financial results, but has also laid off thousands of employees, been pulled up in Indian parliament for misselling its courses, and even had its CEO summoned by India’s child rights body for sales malpractices. To make matters worse, the Enforcement Directorate had raided its offices two weeks ago and seized incriminating documents under the Foreign Exchange Management Act. Byjus’ investors seem to have looked askance at the new developments. In November last year, Byju’s investor Prosus had valued the company at just $5.79 billion, which was a steep 73 percent fall from its peak valuation.
2. Swiggy
Peak valuation: $10 billion
Current valuation: $5.5 billion
Fall in valuation: 45 percent
Swiggy is one of India’s most valuable startups, and had last raised funds at a valuation of $10 billion. But like other tech companies, it’s had a hard time navigating the funding winter. It’s has the dubious distinction of being India’s highest loss making startup, and has been taking measures to cut costs — Swiggy had laid off 380 employees earlier this year, shut down its meat delivery vertical, and sold off its cloud kitchens business. Swiggy has now been valued at just $5.5 billion by its investor Invesco, which is 45 percent below its peak valuation of $10 billion.
3.Ola
Peak valuation: $10 billion
Current valuation: $4.8 billion
Fall in valuation: 52 percent
Ola has been making the news for its electric vertical in recent times, and has become one of India’s top EV manufacturers. But its ride hailing vertical hasn’t had the best time of late — since covid, ride numbers have been largely flat, and newer competition, such as from the ONDC-enabled Namma Yatri, is looming. Ola was valued at just $4.8 billion last week by its investor Vanguard, which is down 52 percent from its peak $10 billion valuation in 2019.
4. Oyo Rooms
Peak valuation: $10 billion
Current valuation: $2.7 billion
Fall in valuation: 78 percent
Oyo Rooms is another startup that was hit by the coronavirus pandemic when all travel had essentially ground to a halt. Oyo CEO Ritesh Agarwal has also had to deal with personal tragedy when his father fell to his death from a Gurgaon highrise. But as Covid restrictions have eased, the company has regained much of its business. It’s begun acquiring companies in Europe, and is focusing on its international operations. But in September last year, Oyo’s largest investor Softbank had valued the company at just $2.7 billion, down 78 percent from its peak valuation of $10 billion a few years ago.
5. Pine Labs
Peak valuation: $5billion
Current valuation: $3.1 billion
Fall in valuation: 38 percent
Pine Labs, which builds payments solutions for merchants, had become a unicorn in 2020. Since then, its valuation had risen to $5 billion, and had become India’s third highest valued fintech startup. But its investor, New York based investment management firm Neuberger Berman, hasnow valued the company at just $3.1 billion. This is a 38 percent fall in the company’s valuation over the last two years.
6. Pharmeasy
Peak valuation: $5.6 billion
Current valuation: $4.4 billion
Fall in valuation: 21 percent
Like Pine Labs, Pharmeasy is also a recent unicorn, having attained the $1 billion valuation in 2021. Since then, Pharmeasy saw its valuation soar to $5.6 billion. The pharma space, though, has no shortage of competition — Reliance has acquired a majority stake in Netmeds, and the Tata Group has acquired 1mg. Amidst all this, there is also regulatory uncertainty around the pharma sector on whether it’s even permissible to sell medicines online. All this seems to have weighed on Pharmeasy’s investor Neuberger Berman, which has now valued the company at $4.4 billion, which is 21 percent below its peak valuation of $5.6 billion.
Valuation markdowns by investors isn’t a new phenomenon for Indian startups. In the past, companies like Flipkart and Zomato have also seen their valuations slashed by their own investors. But what this spate of valuation markdowns in some of India’s top startup names suggests that even investors now realize that the macro environemnt has changed, and their companies aren’t worth as much as they’d paid for them just a few years ago. And perhaps most importantly, it could also suggest similar pain for hundreds of India’s smaller companies — their investors don’t typically update their calculations as frequently, but it’s very likely that a vast swathe of Indian startups are now worth far less than what they had been just a couple of years ago.