A US investment firm has reportedly slashed the valuation of ride-hailing giant Ola by 9.5% in dollar terms, bringing down its valuation to $3.3 billion from over $6 billion in 2019.
Between December 31, 2019 and June 30, 2020, the Vanguard Group, which first invested in the ANI Technologies-operated company in 2015, had trimmed its valuation by 45% in dollar terms, according to The Capital Quest.
The Pennsylvania-based investor valued the Bengaluru-based startup’s shares at Rs 10,800 per share on December 31, 2020, and has not revised its estimates till date, the report said.
Ola and its peers in the mobility sector were among the worst hit by the pandemic. In May 2020, CEO Bhavish Aggarwal said that the company’s business was down about 95% due to the Covid-19 lockdown’s effect on its ridership. The company had, at the time, let go of 1,400 employees or about 25% of its total workforce.
Ola declined to comment on TechCircle’s queries regarding the development.
As Ola is a privately-owned entity, its valuation can only be ascertained if the company records a transaction among its shareholders or issues any fresh shares. However, investors can make their own estimates based on different valuation models, cash flows and other operating metrics.
In a growth financing round in 2019, Ola had issued shares to investors at Rs 21,250 per share. The SoftBank-backed company raised over $500 million between late 2018 and December 2019 from Steadview Capital, Hyundai, Flipkart co-founder Sachin Bansal and Kia Motors, among others.
Ola’s rival, San Francisco headquartered Uber Technologies, also had a rough 2020. In August, the company witnessed a 73% drop in its gross bookings in Q2 financial year 2019-20 (FY20). It also announced laid off 3,700 full-time employees across divisions to manage expenses during the Covid-19 pandemic.
According to the report, Uber also saw its share price halve in March 2020, but has now recovered to a valuation of more than $100 billion.