Vanguard slashes Ola’s valuation by 40%

Vanguard, US based investment group, slashed the valuation of India’s largest ride-hailing company Ola by ~40% to $3 billion, a significant drop from company’ peak valuation of $5 billion in November’15 when it raised $500 million. The investment fund valued the shares of ride sharing firm at $182.7 during the November quarter, down from $311.27 per share during previous quarter. The latest valuation slashing was done by Vanguard-owned mutual fund called Vanguard World Fund, which currently holds more than 166,000 shares in the firm valued at $30.37 million.

The valuation mark down by Vanguard is among the many mutual funds/investment houses which have slashed the valuations of Indian unicorns in the last year or so. Vanguard, Morgan Stanley and a clutch of other mutual funds had slashed the valuations of another unicorn of India’s startup industry i.e. Flipkart. The valuation markdowns from mutual fund investors present a stark contrast from the high flying days of 2014 and 2015 when most leading Indian Internet start-ups led by Flipkart raised funds at eye-popping valuations. However, since then, while India’s Internet market has expanded, the number of actual transacting users has barely grown, forcing top investors such as Tiger Global and SoftBank to scale back expectations. Since then large investors have pushed their portfolio companies to strengthen their business models and focus on building sustainable businesses with strong unit economics.