Vanguard Reduces Ola’s Valuation by Over Half, Now Valued at $3.5 Billion

In a substantial development, leading US asset manager Vanguard has decided to slash its holdings in the prominent ride-hailing giant Ola by more than 50%, resulting in a significant drop in the company’s valuation. Ola, founded and led by Bhavish Aggarwal, now finds its valuation reduced to approximately $3.5 billion from its previous $7.3 billion valuation at the close of 2021.

According to a recent report from TechCrunch, Vanguard’s regulatory filings reveal that the investment firm has devalued its shares in Ani Technologies, the holding company of Ola, by a notable 51.6%. These filings illustrate that Vanguard has marked down the value of its Ola shares to $25 million, a significant decline from the original purchase price of $51.7 million from years ago.

Earlier this year, in February, Vanguard had initially valued its Ola shares at around $33.8 million. However, in May, the asset management company executed a 35% reduction in Ola’s valuation, primarily influenced by global macroeconomic conditions, thereby reducing Ola’s estimated value to roughly $4.8 billion.

Ola, a key player in the ride-hailing industry, has managed to secure over $3.9 billion in funding over the course of its operational years, as publicly documented.

As Ola’s subsidiary, Ola Electric, prepares for its initial public offering (IPO), the company has also faced its share of challenges. Notably, Ola Electric reported an operating loss of $136 million (approximately Rs 1,116 crore), alongside revenue figures of $335 million (approximately Rs 2,750 crore), both of which fell short of its publicly disclosed revenue target.

Despite these setbacks, Ola Electric achieved noteworthy milestones. It reported sales of over 150,000 electric scooters for the fiscal year 2023, as highlighted in a Reuters report. Impressively, in the first two months of the fiscal year, Ola Electric exceeded Rs 500 crore in revenue, demonstrating a promising trajectory towards potentially surpassing the $1 billion mark by year’s end.

However, Ola’s journey has not been without its share of challenges. The company underwent a “restructuring” exercise in January, leading to the layoff of 200 employees across various verticals, including Ola Cabs, Ola Electric, and Ola Financial Services.

Ola’s situation mirrors a trend observed among several Indian unicorns, as their valuations have experienced significant declines. Earlier this year, Invesco notably decreased the valuation of Swiggy by nearly 50%, setting it at $5.5 billion. Additionally, prominent US investment firm Fidelity reportedly devalued its holding in the indigenous conversational engagement platform Gupshup by over 20% in a span of just one month.

This reduction in Ola’s valuation, propelled by Vanguard’s actions, underscores the ongoing volatility and evolving landscape within the Indian tech and startup ecosystem.”