Ola’s Valuation Marked Down To $3.5 Billion From Last Private Valuation Of $7.3 Billion

Ola Electric might have become India’s largest electric 2 wheeler company, but its parent isn’t doing quite as well.

Ola’s investor Vanguard has marked its valuation down to $3.5 billion. This is the fourth consecutive time Vanguard has marked down Ola’s valuation. Ola had last raised funds at a valuation of $7.3 billion, which indicates that Vanguard believes that it worth less than half of that.

Vanguard had first cut down the value of its investment by 45 percent in 2020, when the coronavirus pandemic had ground most of Ola’s fleet to a halt. It had then cut Ola’s valuation by 9.5 percent in 2021. In February this year, Vanguard had slashed Ola’s valuation by another 35 percent to $4.8 billion, and has now slashed it once more to $3.5 billion. Vanguard holds a 0.7 percent stake in Ola.

Interestingly, Ola’s valuation markdown comes at a time when Ola’s chief rival, Uber, has reported its first-ever profit. Uber reported an net income of $394 million for the last quarter, up $1.0 billion year-over-year, and up $588 million versus the preceding quarter. The company attributed its net gain to a 22% increase in trips on the platform, combined with “cost discipline”. Uber’s stock is up 83 percent since the beginning of the year.

Ola, meanwhile, is seeing its valuation being repeatedly slashed by its investors. This fall in Ola’s valuation mirrors the fall in the valuation of several highly-valued Indian unicorns — Byju’s, Swiggy, Oyo Rooms, Pine Labs and Pharmeasy have all seen their valuations be slashed between 30 to 50 percent by their own investors.

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.