Two major investment firms slashing valuations of Indian startups Ola and Pharmeasy is an alarming sign that could spell trouble for the whole tech ecosystem. Vanguard and Neuberger Berman sharply marked down shares in the popular ride-hailing and health platforms, implying massive reductions in value from just last year.
Vanguard reportedly cut its worth of Ola by a huge 64%. Regulatory filings show the investment giant valued its Ola stake at just $18.75 million now, down from $51.7 million originally. That points to Ola being valued at around $2.65 billion currently versus $7.3 billion in late 2021. It’s not clear exactly why Vanguard moved so drastically, but Ola has faced major challenges like regulatory issues, falling rider demand, and constant losses requiring fundraising.
Neuberger Berman also delivered a gut punch, reducing its valuation of Pharmeasy by a shocking 90% in a very short time frame. The firm now values Pharmeasy shares bought last October at just $823,432, implying a current valuation under $550 million compared to $5.6 billion before. Pharmeasy grew quickly during the pandemic but questions remain about profits and spending with cash getting tighter.
These high-profile markdowns certainly send a worrying signal that faith in Indian startups may be eroding. Major investors seem to be questioning once sky-high valuations that didn’t line up with fundamentals, especially in this riskier global climate. Harsh lessons from flops like Paytm and Zomato left private funders more cautious too.
It’s understandable firms are under pressure to cut costs and lower burn rates now that cheap capital isn’t flowing freely. But this funding pullback also threatens promising companies still shaping business models. The window to refine operations and achieve scale is shrinking for some.
Overall the ecosystem must adapt to this new normal of realism. Startups need well-reasoned strategies focused on self-sufficiency over perpetual funding cycles. Those making it through will emerge stronger, while the rest may not survive this market reset. But India’s digital potential remains bright if the right support can continue fueling innovative solutions to big problems.
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