US investment firm Vanguard slashes Ola’s valuation by 35% to $4.8 billion

US-based investment management company Vanguard has slashed the valuation of ANI technologies, the parent firm of Ola, by 35% to $4.8 billion, according to regulatory filings. Bengaluru-based firm Ola had previously been valued at $7.4 billion.

Vanguard holds 1,85,355 shares, which accounts for 0.7 per cent stake in the ride-hailing firm. The value of Ola’s shares held by Vanguard Group fell to around $203.78 as of February 28, 2023 from $311.85 in August 31, 2022. The US index fund pioneer marked down the holding of its Ola shares to $33.8 million from its purchase price of $51.7 million, as per its latest semi-annual report to investors filled with US Securities and Exchange Commission (SEC).

Vanguard has invested in ANI Technologies through two of its funds - Vanguard World Fund and Vanguard Variable Insurance Fund.  

The updated valuation of Ola shares by Vanguard reduced the Indian ride-hailing startup’s worth to $4.8 billion, a decrease from $7.3 billion at the close of 2021. The company last raised Rs 150 crore as a part of series J round in February last year. This valuation mark down won’t change Ola’s valuation until the company raises new money in another funding round.

While it devalued ANI technologies, Vanguard reported an appreciation in its investment value of Housing Development Finance Corp and Larsen & Toubro (L&T) holdings and a marginal decline in the value of its HDFC Bank shares.  

Ola isn’t the only high valued Indian start-up facing the spectre of slashed valuations. Invesco, another US-based investment company, recently valued food delivery platform Swiggy at $5.5 billion, which represents a massive 49% decrease from the $10.7 billion valuation in January 2022.

Bhavish Aggarwal-led Ola had shut down its used vehicle business, Ola cars, as well its quick-commerce business, Ola Dash, to totally shift the focus on its electric two-wheeler and upcoming electric cars segment. The company lost Rs 328 crore on its ride-hailing business and Rs 653.5 crore on the cab-leasing segment during FY21, according to reports. In January this year, the ride-hailing major also laid-off 200 employees from its Ola Cabs, Ola Electric and Ola Financial Services as part of the "restructuring" exercise.

Ola is yet to disclose it FY22 numbers. As per its last regulatory filings, in FY21,  Ola reported a 65 per cent decline in revenue at Rs 689.61 crore. The company reported its first ever operating profit (profit before finance cost, depreciation, amortisation and tax or EBITDA) at Rs 89.82 crore on a standalone basis. It had registered a loss of Rs 610.18 crore in the previous financial year.

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