Ola’s valuation slashed 35% to $4.8 billion by US investor Vanguard

Funds managed by US investment firm Vanguard marked down the valuation of ride-hailing company Ola by 35% to $4.8 billion, according to regulatory filings with the US Securities and Exchange Commission.

The value of Ola's shares held by the group’s funds fell to around $203.78 per share as on February 28, 2023, from $311.85 on August 31, 2022, Vanguard’s filings showed.

The mobility company last raised $139 million as part of its Series J funding round, led by Edelweiss Private Equity, in December 2021.

The development comes on the back of Ola exiting verticals like food and grocery delivery and second-hand car sales over the past year, to focus on its mainstay ride-hailing business. It had entered several of these businesses following a significant drop in revenue from ride-hailing during the pandemic.

Founder Bhavish Aggarwal’s electric vehicle manufacturing company, Ola Electric, is held separately.
A query on the reduction in valuation emailed to Ola did not elicit a response till the time of going to press Wednesday.

Several late-stage Indian startups have seen their valuation being marked down by their investors in recent months amid a global rout across public and private technology markets.

ET reported on May 9 that Invesco had slashed food and grocery delivery company Swiggy’s valuation to $5.5 billion from its peak of over $10 billion. Blackrock cut edtech giant Byju’s valuation by half to about $11 billion.

Ola's latest valuation cut was first reported by online news portal VCCircle.

Shutting non-core businesses

ET was the first to report that Ola would be shutting its quick-commerce and used-car marketplace in June last year. The company, however, said it would continue to stay invested in the ride-hailing business.

Following the shutdowns, Ola saw 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.

On several occasions, Ola founder Aggarwal had said that the ride-hailing business was profitable, but the company has been facing new challengers after the pandemic.

Swiggy-backed Rapido has made significant inroads into the three-wheeler taxi category. Meanwhile, all-electric cab company BluSmart, backed by BP Ventures, has raised multiple funding rounds and has made plans to expand its fleet above 10,000 by FY24.

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 services that has deteriorated significantly after the pandemic.

Uber has also signed a contract with Tata Motors to deploy more than 25,000 electric cars in the next three years. ET reported on January 4 that Ola was planning to pilot its own EV cab service in Bengaluru with about 1,000 cars.