Domestic tech start-ups continue to face the double-whammy of a prolonged funding winter as well as valuation cuts by investors. ANI Technologies, the parent company of ride-hailing mobility platform Ola, has become the latest tech startup, whose valuation has been marked down by 52% to $3.5 billion from $7.3 billion by Vanguard Group, a U.S.-based asset management company.
According to the firm's securities and exchange filing, Vanguard held 1,66,185 shares, or about 0.7% stake, in Bhavesh Aggrawal-led mobility platform as of May 31, 2023. The asset management company has pegged the fair value of its shares in Ola at $25,038,000, which is a significant drop from its acquisition cost of $51,748,000.
This is the fourth time that the asset management company has marked down Ola's valuation in three years. In February, Vanguard slashed Ola’s valuation by 35% to $4.8 billion from $7.3 billion earlier. Vanguard marked down Ola’s valuation by 9.5% in 2021, and 45% in H1 of 2020.
Notably, just like Ola, new-age tech start-ups such as Byju’s and Swiggy are also grappling with valuation cuts. In June, tech investor Prosus significantly reduced the fair value of its 9.6% stake in Think & Learn Pvt Ltd, the parent company of edtech behemoth Byju's to $493 million, as of March 31, 2023. With this, the tech investor has marked down its valuation at Byju's by a staggering 75% to $5 billion from $22 billion last year.
Meanwhile, US-based investment management company Invesco has also marked down Swiggy's valuation for the second time this year, reducing it by less than half to $5.5 billion. The U.S.-based investor had valued the food delivery company at $10.7 billion in January 2022 and $8.2 billion in October 2022.
In the H1 of CY2023, the funding amongst the domestic start-ups declined by 36% to $3.8 billion across 298 deals in the first half of 2023 as against $5.9 billion in H2 of CY22, according to PwC. This is the lowest funds raised by domestic startups in the last four years.
Growth- and late-stage funding deals accounted for 84% of the funding activity in H1 CY23 in value terms. Growth and late-stage funding rounds represented 43% of the total count of deals in this period. The average ticket size in growth-stage deals was $19 million and late-stage deals were $52 million during H1 CY23.
The early-stage deals accounted for 57% of the total funding in H1 of CY23 in volume terms. In terms of value, early-stage funding contributed to approximately 16% of the total funding in H1 CY23 but was at its lowest in H1 CY23 as compared to the previous two years.
Another report by GlobalData reveals that venture capital funding activity in domestic startups declined by 76.4% year-on-year (YoY) in terms of value. A total of 568 VC funding deals worth $3.7 billion were announced in the domestic startup ecosystem in India in H1 of 2023, down 43.3% YoY in terms of deal volumes.